U.S. Bancorp said Thursday that it would acquire Harley-Davidson Inc.'s $150 million credit card portfolio.
The deal will add 190,000 cardholders to U.S. Bancorp's credit card business, the 13th-largest in the country. The cards will remain under the Harley-Davidson brand and U.S. Bancorp will work with the motorcycle company to offer additional credit products and reward programs to its customers.
"Harley-Davidson has the highest level of brand awareness of any motorcycle, and its customers have a strong preference for Harley-Davidson branded products and services," said Daniel Frate, president of payment systems at U.S. Bancorp. "Through our alliance with Harley-Davidson, we will build on this brand loyalty and create greater value for existing and new Chrome Visa customers."
Mr. Frate said a new rewards program is in the works that might include points redeemable for travel and Harley-branded merchandise. The points would be called "chrome dollars." U.S. Bancorp said it would continue Harley-Davidson's "free-ride sweepstakes" through yearend, where one motorcycle is given away each month.
The agreement fits into U.S. Bancorp's existing cobranding strategy. The Minneapolis-based bank also issues cards for Amway, Staples Inc., and Northwest Airlines. Its most recent cobranding deal was with Kroger Co., which started in September.
U.S. Bancorp plans to add more cobranded cards to its roster, according to Mr. Frate. "We've had very good results with other partners in terms of utilizing partner channels for new account growth," he said.
U.S. Bancorp and Harley-Davidson are working together to market credit cards at Harley's main annual events: a hog rally in Daytona Beach, Fla., and the annual biker rally in Sturgis, S.D.
Donna Zarcone, president and chief operating officer of Harley-Davidson Financial Services in Milwaukee, said, "To make the Harley-Davidson Chrome Visa more attractive to customers, we must provide certain privileges and benefits, such as a rewards program."
"The economies of scale inherent in the arrangement with U.S. Bank will generate greater benefit opportunities for our customers," Ms. Zarcone said.