
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, April 2, 1991                   TAG: 9104020122
SECTION: BUSINESS                    PAGE: A5   EDITION: METRO 
SOURCE: Los Angeles Times
DATELINE: NEW YORK                                LENGTH: Medium

CITIBANK'S NEW CREDIT CARDS OFFER BARGAINS WITHOUT HUNTING

Responding to heightened competition, Citibank announcement Monday that it would give refunds to its credit card members who use Mastercard and Visa to make purchases and later find the items advertised at a lower price.

Citibank, the biggest U.S. issuer of credit cards, said the "price protection" plan automatically will cover all 30 million of its cardholders.

The initiative comes as competition in the consumer credit card world has become increasingly fierce, particularly since AT&T's successful introduction of its Universal Master and Visa cards.

Industry executives said the Citibank move was an attempt to distinguish the bank's cards from its rivals. But analysts predicted that other major card issuers, such as AT&T, Sears and even American Express, eventually may match the Citibank enticement.

Under the new plan, a consumer who uses a Citibank card to buy a product and within 60 days sees it advertised for less would be refunded the price difference by Citibank. Consumers may be reimbursed up to $250 per item and a maximum of $1,000 per year.

There are restrictions, however. Cardholders must supply Citibank with both the store and credit card receipts, and must send in a printed ad listing the identical item for a lower price. The plan includes most items sold in stores, except for perishable items. But it does not include airline tickets or any other type of tickets, services, nor items for which the price is considered negotiable, such as artwork, antiques, stamps and coins.

James L. Bailey, the Citibank executive in charge of the credit card division, declined in an interview to estimate the cost of the program, which will run through the end of the year. But he said the bank hopes to recoup the cost by attracting new business and encouraging card holders to use their cards more often and to make bigger purchases.

The refund plan is the latest program initiated by credit card issuers to drum up new business. American Express developed an extended warranty program in which cardholders are covered against loss if items bought with their cards are lost, stolen or destroyed. Most banks have matched that program, and some have developed other inducements. For instance, Sears' Discover Card offers its members 24-hour road assistance, a travel hot line and rebates of 1 percent of a customer's total card charges.

But until Monday, only a single bank, Valley National Bank of Phoenix, Ariz., offered a price protection program. Charley Schmidt, manager of Valley National's bank card services, said his bank has had a program virtually identical to Citibank's in place since Oct. 1.

by CNB