U.S. Bancorp, the largest bank issuer of commercial cards, has teamed up with Staples Inc. to offer a small-business card that gives discounts to cardholders on Staples products and travel services.

As profits in the consumer card business continue to shrink, big banking companies are increasingly focusing on the small-business market.

Typically, entrepreneurs rely on their credit cards to fund their start-ups, often obtaining credit based on their personal credit histories, because banks are reluctant to grant credit in the name of the small business. Banks reviewing credit applications from small-business operators do extensive reviews, requiring in some cases a minimum net worth and requesting tax returns for two years, according to Stanley W. Anderson, president of Anderson & Associates in Arvada, Colo.

U.S. Bancorp's cobranded card with Staples would enable cardholders to build up credit in the name of the business.

Recently a number of large banking companies have announced a variety of initiatives to capture bigger shares of the small-business market. For example, FleetBoston Financial Corp. announced an alliance last week with an Internet start-up, Biztro, that performs back-office support functions for small businesses.

The Staples card is part of a larger initiative by U.S. Bancorp to penetrate the small-business market. In the past six months the Minneapolis-based company has increased its small-business sales force by 25%. About 10% of its total sales force focuses on small businesses, said Jordan Mauer, vice president of small-business development. "We made the strategic decision in November to focus on small business," he said. U.S. Bancorp has about 500,000 small-business relationships. The vast majority of these companies have annual revenues under $1 million.

This market is attractive to banks for a number of reasons. For one thing, small-business owners typically do not pay off their card balances each month. These cards provide a rich source of interest income at a time when a lot of consumers are paying off their credit card debt, said Chris Staab of Auriemma Consulting Group in Westbury, N.Y.

Only a handful of cobranded credit cards are designed for the small-business market, and U.S. Bancorp already issues two others: the Worldperks Visa card launched with Northwest Airlines in 1994, and an Amway Visa card.

The Staples card is unique in that it offers discounts on products without imposing an annual fee. Other perks include a lower interest rate on purchases exceeding $1,000. The rate is based on the prime rate plus 7.9 percentage points, and credit lines are to be up to $50,000.

U.S. Bancorp said it plans to market the card primarily to Staples' seven million small-business customers. "It's a way for us to extend our brand and product offerings beyond our traditional U.S. Bank footprint," said Ann Hathaway, group product manager responsible for U.S. Bancorp's cards and lines of credit to small businesses. Ms. Hathaway said the company hopes to attract customers through the program. The card will be marketed by direct mail and in Staples stores as well as through print advertising.

U.S. Bancorp is the second-biggest issuer of commercial cards, behind American Express Co.

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