THOUGH HE HAS taken Wachovia Corp.'s card division to new heights, Jerry D. Craft can't afford to relax. Complacency entails too great a risk.

Mr. Craft has only himself to thank for that, since Wachovia's aggressive pricing strategy is one reason life in the credit card lane has become so fast and furious.

Despite a stolid conservatism that historically has paid off handsomely for shareholders, credit cards brought a change. The North Carolina-based superregional helped push the card industry to new interest rate lows, boosting its profits and market share in the process.

Mr. Craft, who engineered the strategy as president of Wachovia Bank Card Services Inc., Atlanta, has a vision of the industry's future that is disconcerting many bankers.

"I am convinced that, with the American free enterprise system, there will be more competition, more deals," he said.

Nonbank companies have become driving forces for competition and change. Mr. Craft predicted that credit card profit margins may be driven down to 1.5% to 2% on assets, less than half what they were just a few years ago.

"That's the reality I see," he said matter-of-factly. "One of the things we have to keep in reserve is a little bit of nimbleness to adapt to the marketplace. What's strong today may not be in 1995."

The 46-year-old South Carolina native began his career in 1969 as a Master Charge trainee at First National Bank of South Carolina. He worked at progressively higher levels for NCNB Corp. and First National Bank of Maryland before becoming First Atlanta Corp.'s credit card chief in 1982.

Mr. Craft remained in that post when Wachovia took over First Atlanta. He was named senior vice president in 1984 and executive vice president four years later.

Currently, he is president of Wachovia's credit card bank in Wilmington, Del., and executive vice president of Wachovia Bank of Georgia, in addition to heading the company's credit card division.

Two years ago, Mr. Craft adopted the low-rate pricing strategy that Wachovia had experimented with earlier. He came to view it as not just a fad but a lasting trend to which consumers would respond.

The "Prime Plus" variable-rate product now charges 8.9% interest and a $39 annual fee. When it was introduced, the prime rate was 10%, and most cards were charging 20%. Wachovia issued its millionth Prime Plus card this year.

"We looked a lot smarter than we intended," Mr. Craft said in a recent interview. The attractive price and accompanying ad campaign prompted customers of other banks to transfer balances from higher-rate cards.

Although many banks lured customers with transfer-check programs, Wachovia made it painless for consumers, with no time limit on its low interest rate, no added fee, and no restrictions on eligibility for the low rate.

In the first six months of 1993, consumers shifted $355 million into Prime Plus Visa and MasterCard accounts. In all of 1992, transfers totaled $425 million.

Wachovia's outstanding card loans grew 33% last year, to $2.2 billion. By June 30, they were up another 18%, or 50% year-to-year, to $2.6 billion. It has 1.55 million accounts, up from 1.28 million a year ago.

In terms of size, Wachovia remains a middle-tier card issuer -- neither a giant nor a gnat. Credit Card News, a Faulkner & Gray newsletter, ranks Wachovia 21st in outstandings, just behind Signet Banking Corp.

The credit card division produced 15% of Wachovia's $317 million of noninterest income through midyear. And cards were the only significantly growing category of loans. Meanwhile, net chargeoffs were down 20.9% in the first half

Wachovia's growth exceeds that of the card industry, and its profitability proves significant returns are available on a well executed strategy.

"That is one bank that I fully expect will continue to grow," said Alex W. Hart, president of MasterCard International. "They are one of the very best in our business, and Jerry Craft is one of the very best and smartest managers.

"This is a large market, well over $200 billion in loans, $400 billion in sales volume," Mr. Craft said. "Therefore, you have to find that niche, pick your strategy, and do it well."

Wachovia defined its niche as people with $1,500 to $2,000 in debt they revolve. Because of its steep annual fee, Prime Plus does not generally appeal to those who pay off their balances without incurring finance charges.

While many other card issuers have gone with enhancements, rebates, or cobranding, Wachovia will stick with its price-leader strategy, perhaps with some adjustments.

"Wachovia, historically, has not been a major credit card player," said Diane B. Glossman, a Salomon Brothers analyst. But the company is successfully undercutting the rest of the market. "They were one of the first to come up with variable-rate products," she said. "With changes in pricing, they have used it much more aggressively."

Mr. Craft has also made a name for himself as one of the card industry's "big thinkers." A longtime activist in groups like the Consumer Bankers Association and the Federal Reserve Board's Consumer Advisory Council, he keeps abreast of legislation, consumer-behavior trends, and the economy -- in addition to the competitive and financial developments that directly affect Wachovia Bank Card Services.

His energy and intellect contributed to his reputation for prescience -- being able to read turns in the market from which Wachovia has profited.

"He keeps his strategic hat on," said Cynthia A. Graham, president and chairman of Barnett Banks Inc.'s credit card unit. "He looks at the big picture."

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