American Express' Optirna card is emerging from the doldrums.

After maintaining a low profile for much of last year, the card is back, being marketed full throttle to American Express cardmembers. And there are plans to attract customers from outside American Express.

Serious loan losses early in the life of the six-year-old revolving credit product forced a retrenchment that resulted in virtually no marketing between 1991 and June 1992.

A Select Group

Optima was expected to attract upscale, creditworthy borrowers because only American Express customers were invited to own the card. Nonmembers could apply for an Optima card with a $25 annual fee, which is $10 more than the member fee.

"Just two years ago the Optima card was pretty much a disaster," said Frank Skillern, who headed the Optima card unit until Aug. 20. He then was named president of the consumer card group for the United States, which is responsible for American Express green, gold, and platinum cards. "Nineteen ninety-two and 1993 are what I call fix-it years, and 1994 on will be growth years."

Philip J. Riese replaced Mr. Skillern as head of Optima and other consumer loan products. Mr. Riese was also named chairman and president of American Express Centurion Bank which issues Optima cards.

Deals for Good Customers

Refinements in the program were in progress under Mr. Skillern. In June 1992 Optima introduced a three-tiered pricing structure, rewarding active and reliable customers with rates.

Optima was redesigned in early 1993 to create a unified look for the card in blue and silver, as opposed to three separate cards with different colors.

In May, the company introduced a rewards program - a point system designed to stimulate card usage.

"Our first target is our own card base - the people who know us, like us, and, I believe, will use our revolving card rather than a bank card," said Mr. Skillern.

Separate Lines Abolished

Last October, in an earnings statement, American Express announced that this year it would no longer offer special lines of credit with the standard, gold, and platinum cards. Credit lines became part of the Optima product line.

The change was part of an effort to streamline credit operations, but it also stressed Optima's growing role as American Express' only true credit card.

Back-Office Consolidation

The earlier lines of credit, which are mostly drawn down using paper drafts, or checks, are being merged with Optima lines.

The result: Consumers will get larger credit lines and American Express will consolidate its back-office and bank operations. What were previously four credit businesses become one.

In October the back offices and service centers for the separate lines will move from Delaware to Jacksonville, Fla., where the Optima program is being handled.

"We had two of everything" before the change, Mr. Skillern said. "Now we will have one system that determines how all American Express customers are issued credit."

Letters of Explanation

Customers who have only a line of credit will be issued a Master Optima line. It works the same way as it always did, but will have the same interest rate as the Optima card.

A customer who has both an Optima card and a line of credit. will keep the Optima card, but the line of credit will be folded into the account.

Letters to cardholders explaining the changes were sent out in late August.

"We have been working on a credit infrastructure throughout 1993 that allows us to give money to people who we know will give it back to us," said Mr. Skillern.

Those creditworthy people will very likely now include customers other than American Express cardmembers - a direction that bankers have long suspected Optima would take.

Acquisition Tool

Officially, American Express says there has been no formal approval for broader marketing efforts.

Mr. Skillern said, "We are working on plans to use the Optima card as a tool for acquiring people into the American Express franchise."

In a recent telephone interview, Mr. Skillern added fodder to speculation that American Express might issue a Visa or MasterCard to nonmembers, a strategy that analysts have been been gossiping about for some time. It would raise the same competitive issues that led MasterCard International and Visa U.S.A. to resist membership applications from Dean Witter, Discover & Co., owner of the Discover card program.

Dean Witter filed an antitrust suit against Visa to force its admission, and has won a federal jury trial. Visa is appealing. A similar battle is under way against MasterCard.

"If Discover wins its case, American Express may want to issue MasterCard or Visa, because the company realizes that its members own bank cards anyway," said Guy Moszkowski, an analyst with Sanford C. Bernstein & Co.

Mr. Skillern conceded that American Express is working on "a revolving credit card of some kind outside the the American Express card base."

He said the product would be similar to the current version of Optima. The company is currently conducting focus groups to help determine the card's features.

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