Seeking to capitalize on consumer anxiety about rising interest rates, Wachovia Corp. is offering a lifetime prime rate commitment on MasterCard and Visa credit cards.

Claiming another first in carrying out its price-leader strategy, Wachovia pegged its Prime For Life product at whatever the prime interest rate is - currently 9%.

The Winston-Salem, N.C., company, which bases its credit card operation in Atlanta, is aiming the new card primarily at customers maintaining balances of at least $1,000.

"This looks like a great deal, though it won't be right for everyone," said Ruth Susswein, executive director of Bankcard Holders of America in Herndon, Va. "It is in line with our philosophy, in that we have been telling consumers to look at how much they're spending on interest, not just the annual fee."

Wachovia is also offering a Prime Rebate Plan to customers unsure about what their card balances will be. This package is priced at the prime rate plus 3.9% for a year, plus a $28 annual fee, or $38 for a gold card.

After a year, Wachovia said, it will calculate whether the consumer would have benefited more if the rate had been set at prime. The company would then refund any amount beyond the $60 difference between the products' annual fees. Wachovia charges $88 for its regular Prime for Life card and $98 for the gold card.

Beverly B. Wells, president of Wachovia Bank Card Services, said the rebate plan "assures that customers will get the best value, based on the rate and fee option that saves them the most money."

The offering represents a departure from prior promotions in which reduction or elimination of the annual fee was the key attraction. AT&T Universal Card Services, for example, has scored big with a promise of no annual fee for life.

"Even though many credit card customers were paying much more in interest, they were more concerned about the annual fee," said Robert B. McKinley, president of RAM Research Corp. in Frederick, Md.

Their goal is changing toward avoiding skyrocketing interest rates. Wachovia notes that over 50% of all cardholders nationwide currently pay an annual percentage rate of at least 17.99%.

"The increased attention given to credit card solicitations over the past three to four years heightened consumer awareness of the total cost," said Ms. Wells.

Mr. McKinley said fears of consumer backlash may be motivating card issuers. "Three out of four cards are now variable, which is two times as many as there were three years ago," he said. "Some issuers have been throwing rate caps on at between 19% and 20%. You'll see more of that.

"The challenge over the past three years has been to find and hold on to quality cardholders. I wouldn't be surprised if (what Wachovia is doing) became a trend."

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