ONE CAN MAKE A handsome living in the bank credit card business, but it is not for the faint of heart.

This special section of American Banker spotlights some o the more successful card organizations and their leaders, the key innovations, and the people behind them who have done well in increasingly challenging segments of the business.

They see competition intensifying, and coming from entirely new quarters. Profit margins are lower.

Trend-watchers warn that the credit card has nearly saturated its market. Much of the population is disenchanted with debt and its costs; many borrowers seek out home equity loans, which unlike credit cards let them deduct interest on their taxes.

The good news is that the bank card industry is growing -- receivables could be up by 10% or more by yearend -- and it will set another profit record. Joel Friedman of Andersen Consulting in San Francisco said aggregate net income could hit $7 billion, perhaps 20% to 25% better than last year.

"Competition is driving down rates and fees, but the cost of funds has dropped faster, and chargeoffs are down significantly," Mr. Friedman said.

The bad mews -- a spike in interest rates -- hasn't happened yet. Some card bankers are concerned about the lowering of that boom, but most have plenty of other things to worry about right now.

The business has become one of micromarketing and niche-seeking, which often means taking customers away from somebody else.

The rapid growth of cards bearing the names of General Motors Corp. (seven million cards in less than a year) and American Telephone and Telegraph Co. (17 million in three years) came at the expense of traditional banks. And the banks have answered with more aggressive and flexible pricing of their own.

"The intensity of the competition is not new, but it is not letting up," said Denny Dumler, president of Rocky Mountain BankCard System in Denver.

Jack David, executive vice president of BankAmerica Corp.'s Seafirst unit in Seattle, is concerned that bankers have not fully confronted the threat of nonbank card issuers and their lower cost structures.

"AT&T and GM attacked this business on the basis of price and value," the Seafirst marketing executive said. "I'm not sure that banking has answered" in kind.

Each executive profiled here has played a part in reshaping or refining the bank card business.

This publication's "all-star" list is by necessity short, and some worthy people may feel slighted. Consider the group representative of what institutions and individuals are doing to make a difference in a big and competitive field.

Among those worthy of at least honorable mention:

* For innovation, Wells Fargo & Co. Its California Advantage Card lets cardholders accumulate rebates of 5% of purchases and apply them to mortgage costs. The product is less than six months old, and Wells has not disclosed its results, but competitors have paid the compliment of calling it a winner.

* For customer service, Norwest Corp. Its card unit near Des Moines reengineered its system to give customer service representatives access, through a powerful workstation, to all the account and product data they need to respond to questions and problems -- right down to the scripts used in cross-selling or dealing with requests for credit-line increases.

* For technology, First of America Bank Corp. The Kalamazoo, Mich., company acquired Security Bancorp in 1992 and, with it, a card portfolio larger than its own. Yet functional cost studies show First of America, with $1 billion of card loans, is more efficient than some much bigger issuers.

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