THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Wednesday, March 22, 1995 TAG: 9503220253
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY TOM SHEAN, STAFF WRITER
LENGTH: Medium: 58 lines
Automakers and airlines have them. So do oil companies and department stores.
Now the country's largest chain of video-rental stores has launched a credit card that provides rebates to its customers.
Blockbuster Entertainment Group has teamed up with NationsBank Corp. to issue a VISA card providing a 5 percent rebate on purchases at Blockbuster Video and Music stores. The 5 percent rebates also apply to spending at two other Blockbuster units, Discovery Zone childrens' entertainment centers and Paramount Parks.
Purchases made with the Blockbuster card at all other retailers accepting VISA cards will provide card-users with a 1 percent rebate.
The rebates, in the form of ``Blockbuster Bucks,'' can be applied to rentals and purchases at Blockbuster stores and entertainment facilities. The rebates, to be issued in $5 increments, will be included in a card-user's monthly statement.
NationsBank operates a similar ``co-branded'' card program with air carrier USAir and provides card-users with mileage on USAir pegged to the dollar volume of their charges.
As the competition for card-users intensifies, banking companies such as NationsBank have devoted greater resources to card programs tied to rebates from companies selling consumer goods and services.
``In the next two to two-and-a-half years, over 50 percent of the cards in the United States will be co-branded,'' Carl F. Pascarella, president and chief executive of VISA U.S.A., predicted during a Blockbuster-NationsBank news conference.
The Blockbuster card, which carries the company's blue-and-yellow logo, has no annual fee. And for the for the first six billing periods of a new card account, NationsBank will charge an introductory interest rate of 9.9 percent on balances carried on the card.
Afterward, card-users will be charged the prime lending rate plus 9 percentage points, Eileen Friars, president of NationsBank Card Services, said during the news conference.
With the prime rate currently at 9 percent, the charge on Blockbuster card balances after the six-month introductory rate would climb to 18.9 percent.
The Blockbuster card program will account for some of the 300 jobs that NationsBank expects to add this year at its card-processing facility in Norfolk, said Jackie Herold, a NationsBank spokeswoman. The company, which employs 1,600 at offices in downtown Norfolk, announced its expansion plans in January.
At the end of 1994, NationsBank had 5.4 million card accounts and $5.87 billion in card loans outstanding.
NationsBank said it will begin promoting the Blockbuster card Monday with a combination of print and television advertising.
Blockbuster Entertainment Group is a Fort Lauderdale, Fla.-based unit of Viacom Inc., an entertainment and publishing company. by CNB