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

DATE: WEDNESDAY, June 1, 1994                   TAG: 9406010070
SECTION: BUSINESS                    PAGE: B-8   EDITION: METRO 
SOURCE: 
DATELINE:                                 LENGTH: Medium

NEW FAD IN PHONE CARDS RINGS COLLECTORS' BELL

Big McStake.

That card now sells for $125, coveted by a small but growing network of collectors who believe phone-card mania is about to sweep the nation.

To hear them talk, phone cards soon will be the world's hottest collectibles, bigger than coins, stamps or even baseball cards.

``We're seeing our numbers increase daily,'' said Scott duPont, who runs three small stores - two in Orlando, Fla., and one in Houston - that specialize in phone cards.

``Some days we might sell 50 or 60 cards, which is amazing, considering that nobody knows what they are.''

OK, so what are they?

Prepaid phone cards, also called debit cards or telecards, allow you to make long-distance calls without coins or a credit card. You pay for the card up front, in denominations of $2 to $100. Then, you call a toll-free number, punch in the card's account number, and place your call. The account is drawn down as you talk; when the time's up, you can throw out the card.

Then again, you might want to hang onto it.

A card that New York Telephone handed out at the 1992 Democratic National Convention was worth $1 in phone time. Most people threw them away, and now an unused card can fetch $1,700.

Within a week after the McDonald's promotion ended, the three-minute cards were commanding $50. Collectors rummaged through trash bins and landfills in the East Coast and Midwest cities where 300,000 cards were issued.

``I know one collector who's crying now,'' duPont said. ``Last summer, he took his kids to McDonald's every day. He was tearing these cards in half and throwing them away. When he came to my shop last week and saw the AT&T card showcased, he flipped out.''

Phone-card collecting already is popular in Europe, where prepaid phone cards have been used for years. The U.S. market is just getting started.

Two years ago, fewer than a dozen companies issued prepaid phone cards in the United States. Now, there are at least 130, said collector Gary Felton of Santa Monica, Calif.

A phone-card subculture is emerging. Three-thousand people attended the first U.S. phone-card convention held in March in San Francisco. Another is planned for this fall in New York. There's even a monthly phone-card magazine, Premier Telecard, published in San Luis Obispo, Calif.

The variety of cards is limited only by the bounds of good taste, and sometimes not even by that. There are cards featuring Elvis, Marilyn Monroe, panda bears and sports heroes. One even shows eight swimsuit-clad Playmates crammed into a phone booth.

Not all cards soar in value. Indeed, the proliferation of cards may prove self-defeating.

Long-distance deregulation and technological advances have enabled nearly anyone to buy blocks of phone time and sell prepaid cards. The market is being flooded by flashy cards, often issued in limited runs of 1,000 or 2,000.

The future of collecting hangs largely on whether the cards catch on as usable items. So far, the nation's three biggest long-distance carriers - AT&T, Sprint and MCI - have shown only mild interest.

Such lack of enthusiasm doesn't sway Felton, who just finished writing a phone-card collector's guide. He predicts the number of U.S. collectors, now estimated at up to 5,000, will grow to a million within two years.