Last year's fastest-growing credit card issuer has gotten smarter about managing the customers it recruits.

Metris Cos. earned the distinction in rankings by RAM Research Group by tripling receivables and doubling its card base. At the same time, it employed state-of-the art technology to extract the most profits from its new customers.

During the second half of the year, Metris tested neural network technology from HNC Software to predict risk, attrition, revenue, and profit. This week, the St. Louis Park, Minn.-based direct marketer said it would use that technology on a permanent basis in a deal with HNC and a unit of First Data Corp.

Ronald Zebeck, Metris' chief executive officer, said cardholder-use patterns are essential elements of marketing. "The real trick is to assess customer portfolios not just on risk, but on use, activation, and sales," he said.

Using the HNC neural network implemented by First Data Solutions, Metris is examining cardholder spending patterns monthly to learn behavior and manage accordingly. This means that the pricing for an account could change monthly, Mr. Zebeck said.

"The industry hasn't done a good job of pricing for the risk," he said. "We look at customers (as individuals) and price them that way."

Susan Roth, an analyst with Donaldson, Lufkin & Jenrette Securities Corp. said that with a 22.9% rate and a $30 annual fee on a typical account, "Metris appears to be well compensated for the risk in its portfolio."

RAM Research reported that receivables grew 197% in 1996, to $1.6 billion, as accounts soared 128%, to 1.8 million.

In October Metris was spun off from Fingerhut Cos., the catalogue marketer, which got into the card business in 1993 marketing a Fingerhut MasterCard. A year later, 14,000 card accounts generated $14 million in outstandings.

With a surge in the card business, but also in marketing fee-based products and extended warranties, Metris grew from 70 employees in 1994 to 200 in 95, 800 last year, and 1,400 this year.

Recently, it promoted three executives to senior vice president: Robert Oberrender, chief financial officer; Douglas McCoy, operations; and Douglas Scaliti, marketing.

"You never have enough executives in place when you're growing and expanding the way we are," Mr. Zebeck said, noting that the company is now looking to fill 50 executive slots.

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