His peers at other credit card companies fret about how to do things faster and better on the Internet, but Ronald N. Zebeck is content to watch and learn.

The president and chief executive officer of Metris Cos. said his target customer is not a Web-head but rather a "high school graduate who has been out for two years and is making $20,000 a year."

Mr. Zebeck said this population eventually will grow facile with the Internet by using it at school or at work; until then, there is no hurry.

Metris, a card issuer and direct marketing company in St. Louis Park, Minn., has taken baby steps toward cyberspace. In August it joined LendingTree, a network of 70 lenders that bid for customers who fill out applications in an on-line loan marketplace. Soon Metris, ranked 11th in U.S. bank credit card receivables, will let customers pay bills and view account balances over the Internet.

In contrast, most large card companies have spent a year or more pursuing comprehensive Internet programs, typically some combination of on-line customer service, marketing, transaction capabilities, and incentives for merchants. As these issuers have raced to buy the choicest banner ads or cut deals with hot Web portals, Metris has largely gone about its traditional business.

"You can't sit back and say that the Internet doesn't exist," Mr. Zebeck said in a recent interview. "I do recognize that the Internet exists and that it won't go away. But I'm not sure the Internet is a business as much as it's a distribution channel."

That relatively laid-back attitude bespeaks an awareness that Metris' subprime customers are just now starting to buy personal computers and get on-line. It is also informed by the mixed experiences of other companies.

"With the Internet, you can't control who visits you, so there is an enormous amount of adverse selection," Mr. Zebeck said. "There is also an enormous amount of infrastructure costs that you need to support a platform so that you may book a relatively low number of accounts."

After ruling out certain Internet strategies -- posting scattershot banner ads, for example, or building an elaborate system on its own -- Mr. Zebeck settled on several ways Metris could exploit the on-line medium.

One is to sign partnerships with companies like LendingTree that have already built infrastructure. "We're trying to pick the right locations where our kinds of customers really come in," Mr. Zebeck said. The LendingTree deal was ideal because Metris can "fill a void for those people who come to the LendingTree location and want to get a credit card," Mr. Zebeck said.

"Where there is a need, where there is an existing platform, we're okay piggybacking," he said, "and we're okay compensating that platform provider on an origination."

LendingTree has a much smaller partner that specializes in subprime credit cards -- Compucredit Corp. of Atlanta, which issues cards through Columbus Bank and Trust Co., a Synovus Financial Corp. subsidiary -- but most of its card companies cater to the mainstream. The First USA division of Bank One Corp. is one LendingTree member that has built a substantial Internet presence of its own.

One area where Metris sees value in do-it-yourself Internet construction is its substantial business in fee-based products. These include a credit bureau monitoring service, product warranties and extended service plans, and credit card registration and insurance programs.

"Those are products that you do seek out information on, and ones for which we think the Internet can expand our channel from just phone or mail or third-party," Mr. Zebeck said. "We're making investments to put up home pages, product pages, cross-selling pages -- links not only to ourselves, but to our partners as well."

Metris markets fee-based products on behalf of other large issuers, such as Bank of America Corp. It also markets residential mortgage products for Countrywide Credit Industries Inc.

Metris, a former subsidiary of Fingerhut Cos., issues cards through Direct Merchants Credit Card Bank, which has 3.5 million card accounts and $6 billion in receivables.

Though the subprime sector sometimes takes its knocks, Mr. Zebeck called his business "more solid today than it was six months ago."

Bank of America and other mainstream issuers target "the top 25 million households," people whose income and credit ratings generally produce lower chargeoff and delinquency rates for credit card issuers, Mr. Zebeck said. Though these people are less risky, the issuers that pursue them have "isolated their universe" of customers.

Moreover, Mr. Zebeck said, these so-called desirable customers can easily be wooed away by another credit card company's offer of lower interest rates and fees. Metris is largely insulated from these problems, he said, because its customers tend to be people with marginal credit records who seldom qualify for credit elsewhere. Many have gotten their first bank card from Direct Merchants and are therefore loyal to the company.

"If we're seeing a slowdown, we may be seeing it in the upper spectrum, but we're surely not seeing it down in the bottom of the spectrum," Mr. Zebeck said. "August was a good month" in Metris' demographic, he said, because "our customers have kids going back to school and they have to buy clothes for them, and they're going to use credit cards to do that."

In late August -- about two weeks after it joined LendingTree -- Metris signed a deal with Home Account, a company in Emeryville, Calif., that sells remote banking and electronic commerce programs to financial services companies. Through this deal, Metris card customers will be able to start handling their accounts through the Internet.

The Home Account service that Metris has contracted for, Canopy Card, includes an e-mail system for cardholders to correspond privately with customer service representatives. Customers can also download statement data into personal financial management software.

Mr. Zebeck said the service has the potential to reduce Metris' operating costs. On-line statements and customer service are "no more than an electronic mailbox," he said.

Randy Kahn, chief operating officer of Home Account, said Canopy Card -- which can cost as little as $25,000 -- has proven attractive to companies like Metris that want to offer transaction capabilities with minimal fuss.

"What we bring to the table is that we've got the basic generic platform completely built," Mr. Kahn said. The service "frees (card issuers) rather quickly to focus on what they can add on top of that."

Another Canopy Card customer is NextCard Inc., the San Francisco credit card company that sells a Visa card tailored for Internet shopping.

Though NextCard's total focus on the Internet has prompted some traditional credit card issuers to worry about their own business emphases, Mr. Zebeck of Metris is skeptical.

"What is the differentiation for NextCard?" he said. "Bank One has been offering credit cards on the Internet for five years, and the last time I checked they were a pretty big Visa issuer."

Moreover, Mr. Zebeck said, "What stops me, or the Bank of Enoch, Okla., or anyone else from saying, 'Okay, I'm the first MasterCard Internet provider out there?' A lot of the Internet hype is going to moderate -- I think you're seeing that already."

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Metris Direct Inc., a subsidiary of Metris Cos., has signed an agent bank agreement with GE Card Services, a unit of GE Capital, to manage operations for 400,000 cobranded credit card accounts amounting to $250 million in receivables.

Under the agreement, which took effect Aug. 1 and was announced last week, GE Capital retains ownership of the receivables. Metris Direct performs all customer service activities, and Metris Recovery Services Inc. -- another subsidiary -- handles collections.

"This relationship enables Metris to further leverage its existing servicing infrastructure and expertise," said Metris president and chief executive officer Ronald N. Zebeck. "It also gives Metris a new, non-credit-sensitive source of revenue, based entirely on our ability to provide quality service to GE Capital."

This year GE Capital sold a $1.2 billion credit card portfolio to Direct Merchants Credit Card Bank, the Metris division that issues credit cards. In that transaction, Direct Merchants Bank assumed ownership of 485,000 accounts from GE Capital.

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