With the United States seemingly saturated with credit cards, marketers are turning more and more to untapped opportunities in Hispanic communities.

Hispanics are the fastest-growing population group in the United States, but only half have credit cards.

One might wonder why it took credit card issuers so long to go after a relatively attractive segment that is concentrated in a few states and easily reached through Spanish-language television and radio advertising.

But credit card issuers began looking at this market only in the early 1990s, and few are actively pursuing it.

Historically, marketing to Hispanics, with their estimated $350 billion of buying power, has required extra effort. It is not just a single ethnic category because it includes people from different national cultures and with variations in their Spanish vernaculars.

Still more challenging is that levels of affluence and assimilation vary from one enclave to another, meaning that undifferentiated, mass campaigns will not hit their targets.

To better understand the intricacies, credit card issuers are beginning small pilot tests of marketing programs before going to a larger scale, and they are turning to consultants for help. (A Puerto Rican bank has targeted this market as well. See story on page 13).

Bank One Corp.'s First USA division has teamed up with Visa U.S.A. to advertise credit cards on Spanish television. The commercials tout the benefits of having a credit card and flash a toll-free number for applying in Spanish.

The ads were pilot tested in August and September in Phoenix and Dallas.

"We're trying to assess what strategies we can employ from what we've learned on the general marketing side," said Jon Munoz, national Hispanic marketing manager at Bank One. "There is a lot of misunderstanding about the Hispanic market, and it is important to convey your message appropriately."

First USA has issued an affinity card for readers of Hispanic magazine for the past two years. It has an annual percentage rate of 9.99%, and approved applicants receive a Waterman pen. The card is advertised through direct mail in English.

First USA also has a number of soccer and baseball affinity cards, which it said are popular among Hispanics.

Chase Manhattan Corp. is to roll out its first credit card specifically for this segment at the end of October. Chase said it is planning some pilot programs but would not disclose details.

Of about 30 million Hispanics in the United States, 65% are from Mexico, 10% from Puerto Rico, 10% from Central America, 5% from Cuba, and the rest from other countries.

"Each country has a particular cultural profile that influences its use of credit," said Felipe Korzenny, president of Hispanic and Asian Marketing Communication Research, Belmont, Calif.

For example, according to Ricardo A. Lopez, president of Edison, N.J.- based Hispanic Research Co., much of the Hispanic population in Miami is more affluent than the general population, but all business is transacted in Spanish, making Spanish marketing a lucrative possibility. But business among Hispanics in New York is transacted in English peppered with Spanish phrases, he said.

Several new magazines targeting young Hispanic women have hit newsstands lately, offering advertising opportunities for issuers.

These magazines are largely in Spanish but appeal to a readership that knows both languages and speaks a vernacular hybrid that has come to be called "Spanglish."

Hispanic Business magazine is written in English with occasional Spanish-language ads. American Express Co. advertises in the magazine, in English.

"It would be offensive to single out Hispanics," an American Express spokeswoman said. "Frequent business travelers are our historic strength, and they all speak English."

Most Hispanic immigrants, however, are blue-collar or farm workers with little education and little trust in financial institutions, industry experts said. They should not be ignored, these experts added.

"Some of the bigger (marketers to Hispanics) are going to make a lot of money," Mr. Korzenny said. "If they pay attention to the needs of the market, they will get very loyal customers."

Mr. Korzenny said studies show a low default rate, 2%, on credit issued to immigrants from Mexico. "The sense of honor in trying to pay your debts is strong," he said.

The main stumbling block is a lack of familiarity with credit cards. In many immigrants' home countries, credit cards are viewed as less prestigious than cash.

Those who come to the United States and realize that credit cards are almost a necessity soon learn that they must establish credit histories. A handful of banks caught on to this early and began marketing secured cards in Spanish.

Bank One began promoting its secured credit card in the early 1990s with bilingual application forms and commercials explaining the value of establishing credit.

People's Bank of Bridgeport, Conn., was one of the first to sell to the Hispanic market-both secured and regular credit cards. Its MasterCard cobranded with the Telemundo TV network was heavily advertised and supported by customer service and correspondence in both English and Spanish.

Secured card customers were upgraded to regular credit cards after 12 months of unblemished payments. The Telemundo card ran into marketing problems and was discontinued, but the rest of the People's program is intact.

Sears, Roebuck and Co. offers regular credit cards with low spending limits to first-time cardholders. It publishes a quarterly magazine for Hispanics, Nuestra Gente ("Our People").

"At one time Hispanics thought if you secured that Sears credit card, you had established yourself here," said Miguel Paloma, vice president at San Jose & Associates in Chicago.

Consultants advise that the easiest way to reach the bulk of the Hispanic population is through Spanish-language television and radio.

"Many of the new immigrants from Mexico do not know how to read and write," said Mr. Lopez of Hispanic Research.

Another subgroup reachable through Spanish-language television is people who were born here and grew up speaking Spanish at home. They identify with their culture but never learned how to read and write the language.

Mr. Lopez warned against mass mailings in Spanish to people with Spanish-sounding surnames. He said English and Spanish efforts must be integrated to succeed.

"If you get mail or calls in Spanish just because of your name, that's offensive," he said.

Nancy Pendas-Smith, president of Conill Advertising Inc. in New York, the Spanish advertising subsidiary of Saatchi & Saatchi, said, "All efforts absolutely have to be done in Spanish.

"There is nothing more insulting than saying, 'Your money is good enough for me-you can apply in Spanish.' But when it comes to helping you it's, 'Sorry. You have to learn to speak English immediately.'"

The operational aspects of Spanish-language marketing can be daunting, and most credit card issuers are reluctant to go the full nine yards.

Translating a few advertisements or an application into Spanish is relatively easy. Setting up bilingual customer service and invoicing is costly and cumbersome.

"Very few companies are willing to take the investment to that level," said Mr. Paloma of San Jose & Associates.

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