Other card issuers are also off to a flying start this month. First USA rolled a new theme card for jazz aficionados called the 'First USA Real Jazz Platinum VISA'. The no-annual-fee, 5.9% intro rate, and 12.99% long-term-rate card will feature images of Miles Davis and other jazz greats. Cardholder benefits include a special newsletter and web site from First USA and a never-before-released John Coltrane CD, a Diane Krall video and discounts on jazz related merchandise and travel. First USA will also promote the card heavily at selected jazz events.

Wachovia announced a major co-branded deal with BMG Entertainment. BMG, a division of Bertelsmann AG, is the owner of music labels Arista Records, RCA Records, Private Music, Windham Hill Group and has a number of related units throughout North America. The 'BMG VISA' card, to be issued by Wachovia in September, will offer cardholders points for each purchase redeemable towards artist-specific rewards such as concert tickets, backstage passes, special CDs, and autographed memorabilia, among many other rewards. Wachovia indicated it intends to pass on its low-rate pricing, the hallmark of its current portfolio, with the new rebate program in addition to no-annual-fee.

Dean Witter, Discover and Company recently rolled out the new 'Smithsonian Card'. The affinity-rebate program will generate support for the Smithsonian and offers cardholders the opportunity to earn a $50 U.S. Savings Bond for each $5,000 charged to the card. The new card carries no-annual fee and 5.9% six-month intro rate. The card will be issued under the 'NOVUS' brand name.

First USA also announced a new affinity program with an alliance of the largest symphony orchestras in the country. The new 'TOPS Symphony Series VISA Card' will produce support revenue for a entire range of orchestral offerings including local urban education, community outreach programs and core artistic initiatives. TOPS members include major symphony orchestras in the 25 largest U.S. markets with each participating symphony logo appearing on the First USA-issued cards. The no-fee card, with a 5.9% 5-month intro/15.9% fixed long-term rate, will be offered at performances and via a toll free number.

American Express demonstrated it aggressiveness with the signing of professional golf sensation and recent Masters champion Tiger Woods to a long-term contract. The five year contract has an estimated value of $20-$30 million, about the same as his Titleist contract. It was rumored MasterCard also participated in the six-month bidding war for the Woods endorsement.

American Express also expanded its relationship with Walt Disney by becoming the "Official Card" of the newly restored New Amsterdam Theatre on 42nd St. in New York City. As the "Official Card", cardholders will have exclusive telephone access to advanced purchase tickets for Disney's Broadway musical 'The Lion King'; preferred seating; private box seats package; easy access ticket window; free coat check; and in-theatre discounts.

Will credit cards become commoditized by the Internet ? Two firms are trying and have squared off in a duel to offer an Internet service to help match consumers with credit card offers. Florida-based Bank Rate Monitor (BRM) and California-based BFC Inc., d/b/a/ GetSmart, launched directly competing services within the past month. Both sites use a proprietary search engine to access a database of hundreds of card offers. BRM's service permits consumers to search card offers solely by pricing while BFC's service enables consumers to search by card pricing and perks. BRM expects to generate revenue via advertising while BFC expects to earn a fee from issuers based on applications generated. BRM also tracks other consumer loans including mortgages while BFC is now developing a mortgage matching service. Neither firm is affiliated in any way with CardTrak or RAM Research.

The Department of Treasury is funding a 'VISA Cash' pilot at the Ft. Leonard Wood Army Post in Missouri. The program launched last month will provide 28,000 new recruits a First Union-issued 'VISA Cash' card to use for the purchase of personal items during their eight weeks of basic training.

Mellon Bank is also planning a smart card pilot with the U.S. Army. The Federal Reserve said this month its most recent quarterly survey of bank loan executives shows a progressive tightening of credit standards for consumer loans, especially credit card loans. About 50% of the banks participating in the survey indicate they have tightened standards for new credit card accounts since the start of this year. Four out of ten banks say they have lowered card credit limits while 15% say they have raised pricing. Among card issuers significantly adjusting pricing in response to deteriorating credit quality is Advanta. Besides raising interest rates Advanta has hiked late, overlimit and returned check fees to $25, shortened purchase grace periods to 20 days and raised cash advance fees to 4% with a $5 minimum. Advanta has also introduced a new $25 account closing, a $15 fee for accounts inactive for six consecutive billing cycles and a punitive interest rate of prime +15.74%.

A San Francisco man was arrested by the FBI at San Francisco International Airport last month after attempting to sell 100,000 credit card numbers for $260,000. According to The Boston Globe the numbers were obtained after the man broke into a San Diego Internet Service Provider's system and installed software to sniff out and record subscriber's passwords. The software did not pick up data as it was transmitted but rather breached the security of the ISP's computer that stored unencrypted credit card data. The FBI became aware of the scheme in early May after the man tried to sell the credit card numbers via an on-line chat session. Sears, Roebuck & Company agreed this month to refund at least $100 million gained through illegal cardholder debt reaffirmation agreements in a settlement with the Federal Trade Commission. The FTC settlement requires Sears to completely redress debtors, with interest, for payments wrongfully obtained. The FTC indicated at least 200,000 Sears' cardholders were victims of the company's illegal collection efforts. The FTC action was coordinated with settlement of a class action lawsuit against Sears.

The controversy over what is driving the rising tide in personal bankruptcies expanded this month with a new report released by VISA U.S.A.. VISA says its analysis of 11,000 personal bankruptcy petitions filed in four states between 1988 and 1996 shows that bank card debt ranged between 4.1% and 15.6% of the filers' total debt. In California the data show a steady ratio of bank card debt to total debt of about 15% over a nine year period. The VISA study suggests a decline in income and heavy housing expenses were common characteristics in petitioners.

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