Providian Update

Another Fleet executive is headed to Providian to oversee the troubled issuer’s systems and operations. Providian also reported Thursday it has completed securitization transactions totaling $2.8 billion to replace maturing or amortizing transactions that total approximately $2.0 billion. Susan Gleason has joined Providian as Vice Chairman, Operations and Systems. Gleason managed Fleet’s operational functions, including all internal and external technology servicing, quality measurement, customer satisfaction performance and fraud. For 13 years prior to that, she worked at Household Credit Services. Gleason is the second top executive to exit Fleet to join CEO Joseph Saunders at Providian. Providian announced earlier this week that Warren Wilcox joined Providian as Vice Chairman, Planning and Marketing. Wilcox also worked with Saunders at Household. Meanwhile, the securitization deals include the completion of a $900 million program with Goldman, Sachs and Salomon Smith Barney. In addition to the transaction, the Company completed two further securitizations, one in the amount of $1.15 billion and the other in the amount of $1 billion. Providian has used proceeds of the new securitizations both to provide incremental liquidity and to renew or replace a number of funding structures. (CF Library 1/15/02)


Small Business Network

American Express announced the creation of OPEN: The Small Business Network. The OPEN Network offers small business customers greater control and flexibility over their finances and other business needs by providing an expanded set of tools, services and savings. In addition to convenient access to working capital and credit information, instant decisioning on all card products and an online tool called the “financial dashboard,” the OPEN Network also provides savings on everyday business expenses and business services from an enhanced lineup of partners.

The creation of the OPEN Network demonstrates the company’s continued commitment to small businesses — a critical component of the nation’s economy, representing 99% of all U.S. businesses and creating three of every four new jobs. In 1987, American Express launched the first charge card specifically designed for small businesses. The creation of the OPEN Network replaces what was previously known as American Express Small Business Services, and all existing customers will automatically become part of the OPEN Network.

“American Express is a leader in serving small businesses and the creation of the OPEN Network raises the bar for what small businesses should expect,” said Kerry Hatch, executive vice president and general manager of OPEN: The Small Business Network from American Express. “The OPEN Network offers small business owners a wide range of enhanced products and services designed to meet their evolving needs, while placing a growing emphasis on the Internet, since so many small business customers use the Internet for business purposes.”

Expanded Functionality and Business Partners

The OPEN Network brings advantages once associated only with big business to small business owners by harnessing the power of the Internet and leveraging strategic partnerships. It gives small business customers greater control and flexibility over their finances – two of their biggest needs, according to focus group research conducted by American Express.

Enhancements include:

* Online Account Management – The OPEN Network offers new, online credit features such as instant decisions on all card products, online card activation, 24×7 access to account information including balance, available credit and payment due date and pre-selected financing offers for existing customers. A new, easy-to-use online tool called the “financial dashboard” provides customers a secure view of their financial standing with American Express, allowing for simple account management.

In addition, small business credit or charge customers can sign up for account alerts through the financial dashboard that notify them through e-mail, cell phone or personal digital assistant when their payment is due or when there is out-of-pattern spending on their Cards.

* Everyday Savings from Industry Leading Partners – Members of the OPEN Network can enjoy new savings on everyday business expenses, including 5% at Dell(TM) and FedEx Ground(R) and 10% off the Best Available Rate at over 1,800 properties in The Hilton(R) Family of Hotels, including Hampton Inn(R) Hotels and Suites.(1) These new partners join the ongoing savings available from Exxon(R), FedEx Express(R), Hertz, Mobil(R) and Qwest(R).

* New Business Services Partners – Members of the OPEN Network also will have access to a host of new, value-added business services and discounts when they use their Cards, including:

* Dun & Bradstreet Small Business Solutions provides OPEN Network members with a discount (20% off Silver subscription rate) for online credit and collection tools used to minimize risk and make more informed, confident business decisions.

* The Small Business Billcenter, provided by Paytrust, enables OPEN Network members to receive, review, and pay all of their bills online in one secure and convenient location at a special savings.

* DigitalWork provides access to an affordable suite of Small Business Marketing Solutions, including direct mail, e-mail marketing and online advertising.

* Enhanced Business Listing on, one of the core businesses operated by Ticketmaster, allows small business owners to post business listings online at their local Citysearch Web site yellow pages at 20% off.

* The Business Travel Center helps small business owners save money with online bookings for air travel, rental cars and hotels, including last minute specials, and provides extensive travel information resources.

* Flexible Payment Options – The OPEN Network provides charge card customers with a new, flexible payment option called the balance payment option, which enables qualified customers to extend payment on their balance for three months. Customers can also enroll in BusinessFlex(R) and automatically extend payment on their charge card balances for up to 12 months.

* Convenient Access to Working Capital, Loans and Lines of Credit – The OPEN Network provides convenient access to financing for small business owners. The online application process is quick and easy, and small business customers who qualify can receive business loans as early as the next business day.

* Online Community of Small Business Owners – At the OPEN Network Web site — – small business owners can connect with other small businesses using a Dun & Bradstreet business directory of over 13 million U.S. companies and get answers to specific business questions from the OPEN Network Small Business Advisor. The OPEN Network will continue to build this online community of small business owners with site enhancements in the near future.

The OPEN Network also will launch new card products later this quarter to supplement the current range of card products it offers small business owners and continue to expand its products and services over time.

“Our small business customers have told us that they want a greater degree of control and flexibility in meeting their cash flow needs, but they also want to be served in the same way they serve their own customers. With new, flexible payment options, the enhancement of our online and off-line service capabilities and value-added savings from an expanding lineup of partners, we believe OPEN: The Small Business Network can expertly meet the unique needs of small business owners,” said Ms. Hatch.

Marketing the Launch of the OPEN Network

The creation of OPEN: The Small Business Network, marks the first time that American Express has created separate branding and a unique identity for one of its business units. The company will support the launch of the OPEN Network with an advertising campaign created by Ogilvy & Mather. Television advertising will break on January 19th during NCAA basketball and NFL playoff broadcasts, and the campaign will also appear in national newspapers and magazines. American Express will market the OPEN Network through direct mail, via the Internet, on outdoor billboards and through special events.

The OPEN Network represents a new way of doing business, and our new branding clearly communicates that to our customers,” continued Ms. Hatch. “We are open to listening to and understanding and meeting the challenges small business owners face day in and day out. We’re open to innovation, to change, and to long-term relationships that will help our customers succeed. And, of course, we’re open around the clock, so our customers can contact us when it’s convenient for them.”

About OPEN: The Small Business Network from American Express

OPEN: The Small Business Network from American Express is a unit of American Express Travel Related Services Company, Inc. The OPEN Network offers small business owners a wide range of tools, services and savings designed to meet their evolving needs, including convenient access to working capital and credit inform_tion, instant decisioning on all card products and savings on business services from an enhanced lineup of OPEN Network partners. The OPEN Network serves nearly three million customers and is dedicated to those companies with fewer than 100 employees. To obtain more information about the OPEN Network, visit or call 1-800-NOW-OPEN to apply for a card or loan.

American Express Company is a diversified worldwide travel, financial and network services company founded in 1850. It is a world leader in charge and credit cards, Travelers Cheques, travel, financial planning, business services, insurance and international banking.


Citigroup 4Q/01

Citigroup reported this morning that profits for its North America Cards unit were up 21% for the fourth quarter and 19% for the full year. While receivables rose 2% last year to $108.9 billion, Citi’s charge volume grew a weak 1%. For the fourth quarter, charge volume declined slightly from $56.8 billion for 4Q/00 to $56.7 billion for fourth quarter 2001. Citi is also dealing with significantly higher charge-offs and delinquency than 2000. Charge-offs hit 5.91% for 4Q/01, compared to 5.48% in the third quarter, and 4.22% one year ago. Delinquency (90+ day) was 1.98% for the fourth quarter 2001, compared to 1.82% for 3Q/01, and 1.46% for 4Q/00. As of Dec 31st, Citi had 92.9 million credit card accounts in North America, excluding Diners Club. Outside of North America, Citigroup had 15.2 million credit card accounts generating $10.3 billion is sales volume and $13.6 billion in receivables during the fourth quarter. For complete details on Citigroup’s 4Q/01 performance visit CardData ([][1]).



Morphis ATManager

Morphis, Inc. has released ATManager, an ATM and Cash Management business software system for automated teller machine networks and financial institutions. ATManager allows companies in the ATM business and financial institutions to more effectively manage their ATM network.

Lang Collins, VP of Marketing, is enthusiastic about the new software product “ATManager was developed over five years of working experience at one of the largest ISO’s in the country. It was conceived and implemented in a real world environment as over 1800 machines were managed over a 5 year period.”

Some of ATManager’s key features are: managing vendor information and lease agreements, keeping ATM machine inventories, importing and manipulating transaction information, performing vault cash management, site management and preparing income/expense statements. The software is implemented to provide users “total control” of ATM/cash management business operation, resulting in significant annual savings and overall increased efficiency. All data is analyzed to provide varied and useful reports.

ATManager provides an “Enterprise Wide Solution” for large numbers of ATMs. The software handles multiple networks and customers. Solutions are focused on individual ATMs and include all aspects of ATM/Cash management.

About Morphis, Inc.

Based in Dallas, Texas and established in September, 1999, Morphis, Inc. is a software development company dedicated to providing solutions to business needs. Morphis also provides techinical and operational consulting for a variety of industries. Their first software product, ATManager, was developed to assist in the management of ATM machines and was developed after more than 5 years of real world experience.


ICBA Promotes Lorence

ICBA Bancard is pleased to announce the following staff promotion. Chris Lorence has been named Vice President of National Sales and State Association Liaison for ICBA Bankcard, an affiliate of the Independent Community Bankers of America. His duties include sales, product support and ensuring product/service satisfaction. As Liaison, Chris is responsible for the relationships between Bancard and 31 State Associations representing independent community bankers. Before coming to Bancard, Chris was Chief Operation Officer of a community based financial organization and has 9 years of senior management experience within the banking community. He has been an employee of ICBA Bancard since February 1999.


Chase 4Q/01

Chase reported Wednesday its operating earnings for its credit card division rose 33% in the fourth quarter and 16% for the full year. Credit card outstanding were up 12% for the year, ending at $40,811,000,000. On a managed basis, the credit card net charge-off ratio was 5.48% in the fourth quarter of 2001, compared to 5.64% for the third quarter of 2001 and 4.86% for the fourth quarter of 2000. For complete details on Chase’s 4Q/01 performance visit CardData ([][1]).

3Q/01 2Q/01 3Q/00 Ann Chg
Recv: $38.2b $37.4b $33.0b +15.8%
Q Vol: $17.9b $17.7b $15.3b +17.0%
Accts: 23.0m 22.0m 19.7m +16.8%
Actives: 14.0m 13.8m 12.5m +12.0%
Cards: 32.1m 30.8m 27.6m +16.3%
b-billion m-million Source: CardData(



Woodworkers Warehouse Card

Trend-Lines Inc. has tapped Shoppers Charge Accounts Co., a division of Hudson United Bank of Mahwah, N.J., to develop and administer a private label credit card program for its Woodworkers Warehouse chain.

Based in Lynn, Mass., Woodworkers Warehouse bills itself as America’s largest specialty discounter of top-quality, brand-name woodworking tools, accessories, and supplies. Its customer base includes consumers and professional contractors. The chain currently operates 99 stores throughout the Northeast, with units located in Connecticut, Delaware, Maine, Massachusetts, New Hampshire, New York, New Jersey, Pennsylvania, Rhode Island, and Vermont. Plans call for opening an additional three to five stores each year, starting in 2002.

SCA services brick-and-mortar and catalog retailers, who also have e-commerce businesses, throughout the U.S. The company acquires retailers’ receivables or will develop private label credit card programs for merchants who currently don’t offer a house charge. In both situations, SCA assumes responsibility for generating customers’ billing statements; managing credit, collection, and lockbox functions; and creating customized marketing programs. Ranked among the nation’s largest private label credit card companies, SCA is a division of Hudson United Bank, a subsidiary of Hudson United Bancorp (NYSE: HU).

Hudson United Bancorp is a $6.7 billion asset company with over 200 branch offices in New Jersey, Connecticut, New York, and Pennsylvania. Hudson United Bancorp’s subsidiaries offer a full array of innovative products and services to commercial and retail accounts, including imaged checking accounts, 24-hour telephone and Internet banking, loans by phone, alternative investment products, insurance products, private label credit cards programs and a wide variety of commercial loans and services including asset based loans, SBA loans, international services and cash management services. Wealth management services are also provided to individuals and businesses. Public sector products and services are provided to local and state governments, municipalities, educational institutions, civic and not-for-profit organizations.


AmEx Triple Delta Miles

American Express announced a nationwide promotion that will give classic, Gold, Platinum and Corporate Delta SkyMiles Credit Card members triple miles for every eligible dollar spent on Delta purchases with their Card* through February 28th.

“We’ve just made traveling with Delta more valuable by giving Delta SkyMiles Credit Card members triple miles,” said Richard Quigley, vice president, cobrand marketing at American Express. “This is in addition to our ongoing program, Always Double Miles, where Delta SkyMiles Credit Card members receive double miles at supermarkets, drug stores, gas stations, home improvement stores, the U.S. Postal Service and on wireless phone bill payments.” The Delta SkyMiles Credit Card allows Cardmembers to earn one SkyMile for every eligible dollar charged to a Delta SkyMiles Credit Card and is accepted everywhere American Express(R) Cards are welcomed. Delta SkyMiles Credit Card members also receive American Express Card features, including 24-hour customer service, Global Assist(R) Hotline, Purchase Protection Plan**, Buyers Assurance Plan** and more. For more information about the Delta SkyMiles Credit Card, visit: [][1] or call 1-800-SKY-MILE. Delta SkyMiles members earn mileage by flying Delta, the Delta Connection carriers, Delta Express, Delta Shuttle and Delta’s airline partners, including Delta’s SkyTeam partners. The Delta SkyMiles program offers many other mileage-building opportunities, including the Delta SkyMiles Credit Card from American Express, MCI, participating hotels, car rental companies, cruise line, restaurants, home buying and selling, flower purchases, shopping and online investing with E*Trade.

Delta Air Lines, the world’s second largest carrier and the leading U.S. airline across the Atlantic, offers more than 5,350 flights each day to 414 destinations in 73 countries on Delta, Delta Express, Delta Shuttle, Delta Connection carriers and Delta’s worldwide partners. Delta is a founding member of SkyTeam, a global airline alliance that provides customers with extensive worldwide destinations, flights and services. For more information, please go to

American Express Company is a diversified worldwide travel, financial and network services company founded in 1850. It is a world leader in charge and credit cards, Travelers Cheques, travel, financial planning, business services, insurance and international banking.

* Enrollment required. Qualifying transactions include all Delta purchases posted 1/15 – 2/28/02. Please allow 8 to 12 weeks after the promotion for bonus SkyMiles to be posted to your Delta SkyMiles account. Delta purchases made from 1/15 – 2/28/02 are only eligible for one bonus mile offer. This offer is available to Corporate, classic, Gold, and Platinum Delta SkyMiles Credit Cardmembers only. In each year of Cardmembership, your points are limited to $60,000 of eligible spending ($100,000 for Gold Delta SkyMiles Credit Cardmembers, unlimited for Platinum Delta SkyMiles Credit Cardmembers) not including bonuses. Always Double MilesSM offer applies at qualifying stand-alone supermarkets, drugstores, gas stations, home improvement and hardware stores, the U.S. Postal Service and on wireless phone bill payments. Not valid in the departments of superstores or warehouse clubs. American Express Cards are not currently accepted for bulk mail. Offer applies for wireless phone bill payments only. To pay your wireless phone bill automatically using your Delta SkyMiles Credit Card, please call your wireless service provider. All standard Delta SkyMiles program rules and conditions apply. (c)2002 American Express.

** Underwritten by AMEX Assurance Company, Administrative Office, Greenbay, WI. Coverage is subject to the terms, conditions and exclusions of Policy AX0951 / AX0953.



Charge-Offs Moderate

Charge-offs fell by 40 bps during November among credit card backed-bonds but remain 100 bps higher than 2000. Delinquency rates for November held steady at 5.2%, but remain 40 bps higher than levels a year ago. According to Standard & Poor’s ‘Credit Card Quality Index’ the monthly charge-off rate among $365 in card securitizations dropped to 6.3% in November from 6.7% in October. This decrease followed a 20 bp uptick in loss rates for October. After steadily declining for most of 1999 and 2000, charge-off rates began increasing at the beginning of 2001 before reaching a peak level of 6.9% in May, the highest point since early 1997 when losses topped 7.0%. For the top major trusts, with more than $5 billion in receivables, 60% reported declines in the 30 bp-90 bp range during November. Of the five largest master trusts, with more than $20 billion in receivables, Chase, First USA, Citibank and MBNA experienced lower losses.

Credit Card Quality Indexes
Nov 99 Nov 00 Sept01 Oct 01 Nov 01
Yield (%) 19.6 19.4 18.9 20.0 18.8
Charge-offs (%) 5.7 5.3 6.5 6.8 6.3
Delinquencies (%) 4.8 4.8 5.1 5.3 5.2
Payment rate (%) 16.1 15.7 14.8 16.2 15.6
Source: Standard & Poor’s


Cyota VbV

NYC-based Cyota yesterday launched First USA’s ‘Verified by VISA” program. Cyota launched the first commercial ‘Verified by VISA’ program in the world late last year with Bank of America. ‘SecureVbV’ is part of Cyota ‘SecureSuite’, an integrated online payment security platform designed to seamlessly integrate a wide range of authentication and credit card security products including ‘Verified by VISA’, MasterCard ‘SPA’ and Cyota’s surrogate number solution, ‘Cyota SecureClick’ into a single user experience. First USA cardholders only need to register their VISA card account once and the ‘VbV’ service is available immediately upon registration. Once registered, cardmembers can shop online at participating retailers using password protection.


Household 4Q/01

Household reported a very small increase in fourth quarter VISA and MasterCard receivables from $17,303,700,000 for the third quarter to $17,395,200,000 for 4Q/01. For the full year, Household’s bank credit card outstandings were down 1.1%. Meanwhile HH’s private label credit card portfolio was up 15.1% for the year, to end at $13,813,900,000. During the quarter, the company purchased a private label credit card portfolio totaling approximately $725 million and the company sold approximately $1 billion in MasterCard/VISA receivables in the United Kingdom to Centrica, its former partner in the ‘Goldfish Card’ program, as part of a settlement agreement. Bank credit card charge-offs dipped slightly to 6.69% for the fourth quarter compared to 6.75% in the previous quarter. Delinquency (60+ day) was up significantly from 3.91% in the third quarter to 4.10% for 4Q/01. Charge offs within the private label portfolio were 5.40% and delinquency was 5.48%. For complete details on Household’s 4Q/01 performance visit CardData ([][1]).