Bank United in Houston has engineered a solo flight in credit card enhancement.

The $10.7 billion-asset thrift designed its own air-miles program for Visa classic and gold cards, adding spice to a plain-vanilla card program.

Bank United had been offering Visa cards for four years through an agent-processing arrangement with First USA Bank.

"Our customers wanted us to issue our own credit cards," said Teri Peterson, senior vice president and marketing director at Bank United, "and the time was right for us to offer our own competitive product."

"Air miles are one of those things that banks wish they didn't have to spend money on," said Randy Petersen, publisher of Inside Flyer, a Colorado Springs-based newsletter, "but at the end of the day, if it means keeping or acquiring another customer, chances are it makes perfect sense to offer them."

As in other air-rewards programs, each dollar spent on card purchases and balance transfers earns a bonus point.

Bank United is not offering discounts on air fares, but it will redeem 25,000 points for a round-trip domestic flight on any U.S. airline.

"Card programs that offer points for any airline aren't typically very big," said Bruce Brittain, president of the Atlanta-based card research firm Brittain Associates Inc.

Issuers that cobrand with individual airlines have large data bases of frequent fliers for marketing targets, Mr. Brittain added.

Both the gold and classic cards list an annual fee of $39. On the gold card, the fee is waived for the first year.

An introductory interest rate of 7.9% holds for the first six months, then jumps to one of four tiers ranging from prime plus 6.7% (14.95%) to prime plus 9.9% (18.15%).

"It's a bit of an uphill battle for a small bank to issue a 'universal' air card with a fee and break through all the clutter in the marketplace," said Mr. Brittain. The key to success will be "to identify, through savvy marketing, those people who think the frequent-flier benefits are worth $39 a year."

The cards will be available nationally, but marketing will be concentrated in Texas. Bank United operates 70 branches in the state.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.