Shopping for a credit card is not what it used to be. The days of credit card issuers bombarding consumers with mass mailings are numbered, says Gomez Inc., the Waltham, MA-based Internet research firm. Instead, online credit card shopping is quickly becoming the first choice of many consumers, it claims.

As of last September, an estimated 15.9 million adults were using the Internet to do some form of banking, Gomez says. In December 1999, that figure was roughly 11 million, indicating an increase of nearly 50% in just nine months.

And while shoppers flock to the Internet more and more to cyber-window shop, the online credit card market seems to stand alone in actually reeling in consumers.

Eight million online adults have applied for credit cards over the Internet, according to Gomez. That accounts for 11.3% of all online adults who have a credit card. The number of mortgages applied for online is an estimated 1.2 million, or 3.2% of all mortgage holders that use the Web. Total personal loan applications made over the Web is 1.8 million, 3.5% of all online adults who have loans or credit products.

Paul Jamieson, director of Gomez's Internet banking team, attributes the phenomenon to the fact that "shopping for a credit card online puts the control back in the hands of consumers." Customers are just getting more of what they want from an online credit card issuer, he says.

"A consumer now has the chance to select a unique and personal product rather than just choosing from what they would receive in the mail," says Jamieson. "Credit cards equal buying power. Some of these sites can give that to you almost instantly."

Gomez recently rated the top 20 Internet credit card sites. The Nextcard site came out first with an overall score of 5.96 out of a possible 10. Factors considered included: ease of use, customer confidence in the site, on-site resources, relationship services and the cost of running the site compared with what it brings in.

The highest-ranked bank site was Juniper at number four. Citibank topped the list of traditional banks, with a score of 5.49, which placed it in the No. 5 spot.

Security First Network Bank, the real pioneer in Internet banking, took second place, followed by the American Express Co.

Some of the most profitable credit card companies did fairly poorly on the list. Providian, the most profitable financial services company in the United States, came in last among the 20, and MBNA, which also is a top earner, placed 19th.

Jamieson says Nextcard, an Internet-only company, has driven the industry over the past year. "The innovation on the Internet comes from the start-ups, like Nextcard. They have no choice but to innovate," he says. "And Nextcard has found that sweet spot."

Nextcard, for example, offers a credit education section that contains a glossary of credit terms and tips for maintaining good credit. It also offers instant approval, a factor that Jamieson says improved its rating.

Nextcard also has a toolbar for online shopping that functions like an e-wallet, allowing consumers to comparison-shop and to store site registration information.

"These companies are redefining the values of a traditional credit card," says Jamieson.And they are also redefining marketing strategies, challenging the traditional leaders to become powerhouses in the credit card industry.

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