N.J.'s Valley National Helping Local Causes With Affinity Programs

Valley National Bank of Wayne, N.J., is carving a niche for itself in the credit card affinity business.

The $3.7 billion-asset bank galvanized the community earlier this year when it partnered with the township of South Orange, N.J., to offer residents a credit card. A portion of the profits from the MasterCard are helping to revitalize downtown South Orange.

The idea piqued the interest of the media, and the program gained national attention when The Wall Street Journal and Money magazine picked up the story.

As a result of this exposure, Valley National has been contacted by a number of counties and cities in various states that are interested in establishing similar card programs. But the bank will not consider forming a partnership outside of its home state, said John S. Harris, senior vice president of marketing.

However, Valley National is courting more than a dozen municipalities and nonprofit organizations in New Jersey, and it expects to announce a number of similar deals.

The first of the programs is being launched this week with the nonprofit Edison Education Foundation, which provides grants for cultural programs that are not part of the budget for Edison's 17 public schools.

Last year, the foundation raised $18,000. The money helped to bring writing workshops to Edison's schools by inviting authors to visit. It also provided field trips to museums and music appreciation classes, among other things.

Valley National is initially sending out 9,500 solicitations to parents with children in the Edison school system.

The interest rate is based on the prime rate plus 5.7%, and there is no annual fee.

The foundation will receive a 1% cut of purchases made with the Edison card, which comes to about $20,000 for every 1,000 active accounts, according to the partners' agreement.

The village of South Orange, which is also receiving 1% of purchases made on its card, has raked in about $20,000 in the four months it has been available. Roughly 800 people own the card.

William Calabrese, mayor of South Orange and the creative force behind the card, said that United Airlines is negotiating with the partners to add a frequent-flier benefit to the MasterCard.

Mr. Calabrese has big plans. If the United Airlines benefit is added, the bank will send out a second mailing, "and we hope to get about 4,000 responses," he said.

Joseph LaCorte, president of the Edison Education Foundation believes that the Edison card will appeal to more than just the parents of students enrolled in Edison's schools.

"The initial mailing is just the beginning," he said. " We are a community of 90,000 people."

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