• Electronic Payment Growth
• Table E-1: Consumer Payments Mix in the U.S.: 2002 - 2007
• Table E-2: Consumer In-Store Payments by Type
• Table E-3: Total U.S. Credit Cards in Force: 2001 - 2003
• Debt Growth
• Household Debt
• Table E-4: Household Debt Outstanding
• Table E-5: Consumer Credit Outstanding
• Interest Rates
• Table E-6: Federal Funds Rate: 1999-2003
• Table E-7: Federal Funds Rate: Monthly: 2004
• Bank Card Profits Overflowing
• Table E-8: Major Card Issuers' Earnings: Selected Companies

• Table E-9: The Top 10 U.S. Issuers by Card Loans in 2003
• Consolidation Trend Makes it More Difficult to Compete
• Competitive Strategy Focus: American Express - Abridged
• Co-Brand Poised for Growth
• Delta SkyMiles Program

• Company Highlights
• Recent Co-Branding Initiatives: Daimler Chrysler and Choice Hotels
• Acquisitions
• Table E-10: 2003 Bank of America Company-Wide Revenue
• and Income
• First Half of 2004
• Table E-11: Card Services June YTD 2004 Revenue
• Table E-12: Bank of America Consumer Credit Card Financial
• Results. Dollars
• Table E-13: Bank of America Key Metrics: Percentage Growth Comparison: 2003 - 2004
• Table E-14: Bank of America New Credit Card Accounts Consumer

• U.S. General Purpose Payment Card Market Expands 7% in 2003
• Co-Branded Cards
• Co-Branded Credit Card Growth
• Table E-15: Co-Branded Card Growth: 2003-2009

• Debit Enters the Co-Brand Arena; Poised for Quick Growth
• U.S. Bank Increases Co-Branded Debit Card Offerings
• Upscale Co-Branded Cards Pushing Consumers Away From Cash
• and Check
• Airline Cards Largely Weather Storm

• Usage Stimulation Trends
• Enrollment Stimulation Practices
• Co-Branded Cards as “Lifestyle Choice”
• Co-Brand Data Creates Important Cross-Sell Opportunity

• Focus on MasterCard
• MasterCard Print Ad Roll-Out
• Co-branding Seen as Key
• Direct Mail: Q2 2004 Numbers

• Data Presented for 12 Co-Branded Cards
• Table E-16: Consumer Ownership and Use of Co-Branded Credit Cards by Type, 2004
• Credit Card Holders: Older, Well Educated, Financially Secure, Married Homeowners
• Co-Branded Mastercard Credit Card Holders*
• Factors Differentiating Co-Branded Mastercard Users from Average MasterCard Users
• Airline/Hotel Mastercard Holders: Condo-owning Males
• Automotive Mastercard Skews to Middle Income,
• Oldest Age Group, Midwest
• Mastercard Affinity Card: Diffused Geographical Coverage
• Other Factors

• The Visa and MasterCard Exclusionary Rule
• Immediate Consequences
• Discover Lawsuit and Partnership Plans
• American Express Lawsuit and Partnership Plans

• The Issuers Fight Back
• Reward Add-Ons: Bank One’s “Flexible Rewards Select” Program
• Citi Upromise MasterCard Incentives Increase
• Table E-17: Affinity Card Growth: 2003 - 2009

Chapter 1: Introduction

• Co-Branding Reemerges
  • What is Co-branding?
  • Co-brand vs. Affinity
  • What is a Co-brand Card Program?
  • What is An Affinity Card Program?
  • How Each Party to the Co-Branded Card is Affected
  • The Issuer
  • The Partner
  • The Cardholder
  • Loyalty in Profits
  • What Makes a Successful Co-Branding Program?
  • Retaining Momentum
  • Chapter 2: Market Growth Drivers
  • Electronic Payment Growth
  • Table 2-1: Consumer Payments Mix in the US, 2002 - 2007
  • Table 2-2: Consumer In-Store Payments by Type
  • Card Growth
  • Table 2-3: Card Growth: 1999-2002
  • Table 2-4: Total Cards: Percent Increase in Number of Transactions
  • Proliferation of the Point of Sale
  
  
• Consumer Credit and Debt Trends
  • Debt Growth
  • Household Debt
  • Table 2-5: Household Debt Outstanding
  • Table 2-6: Household Borrowing
  • Table 2-7: Consumer Credit Outstanding
  • Table 2-8: Personal Saving as a Percentage of Disposable
  • Personal Income
  • Delinquency Rates
  • Table 2-9(a): Insured Commercial Banks - Delinquency Rates on Loans: 1990 to 2002.
  • Table 2-9(b): Insured Commercial Banks - Delinquency Rates on Loans: 2003-2004, by Quarter
  
  
• The Results of Refinancing
  • Bankruptcy Trends
  • Table 2-10: U.S. Bankruptcy Filings 1980-2004 Q1
  • Interest Rates
  • Table 2-11: Federal Funds Rate: 1999-2003
  • Table 2-12: Federal Funds Rate: Monthly: 2004
  • Consumer Confidence Was Healthy
  • Putting it Together: Federal Reserve Says Household Finances Stable
  • Changes in the Debt Service and Financial Obligation Ratios Over Time
  • Increase in Debt Service Ratios for Homeowners Explained
  • Increase in Debt Service Ratios for Renters Explained
  • The Bank Picture: Bank Card Profits Overflowing
  • Table 2-13: Major Card Issuers' Earnings: Selected Companies
  • Table 2-14: U.S. Bank Credit Card Profitability: 1989 - 2003*
  • Consolidation
  • Table 2-15: Top 10 U.S. Issuers by Card Loans in 2003
  • Table 2-16: Assets, Deposits, and Number of Offices of the Fifty Bank-Merger Targets with the Largest Assets, 1994-2003
  • Average Credit Card Interest Rates
  • Fixed-Rate Credit Card Rates Rising
  • Credit-Card Fees Rising

Chapter 3: Competitive Overview

• Table 3-1: The Top 10 U.S. Issuers by Card Loans in 2003
• Consolidation Trend Makes it More Difficult to Compete
• Table 3-2: Number of Bank Mergers, and Assets, Deposits, and Number of Offices Acquired, by Year, 1994-2003
• Recent Ruling Increases Competition
• Immediate Consequences
• Discover Partnership Plans
• American Express Lawsuit and Partnership Plans
• The Year the Brokerages Had Enough
• Charles Schwab
• Merrill Lynch
• Smith Barney

• American Express
• Why Co-brand?
• Rewards
• Delta SkyMiles Program
• Starwood and Hilton Programs
• Costco
• Card Growth and Attrition Rates
• Co-Brand Poised for Growth
• The Future

• Bank One
• Why Co-brand?
• Co-Branding Strategy
• Customer Choice
• Customer Targets
• Spenders, Lenders and Blenders
• Profit and Growth Strategy
• Focus on Card Strategies
• Starbucks Card Duetto Visa
• The United Mileage Plus Cards - Customer Retention
• Target - Account Acquisition
• Disney - Increase Distribution and Maximize Branding
• Poised for Co-Branded Growth
• Table 3-3: Bank One Key Projected Performance Metrics per Booked New Account: Volume Metrics

• Private Label Activity: Citibank and Bank One Go Round and Round
• Citigroup Card Audiences: Hypotheses Offered
• Co-Branded Marketing Strategy in a Nutshell

• Travel Related Services Division
• MBNA Agreement
• Consumer Card
• Co-Branding Partners
• 2003 Revenue and Income
• Table 3-4: 2003 American Express Company-Wide Revenue and Income
• Table 3-5: American Express Selected Statistical Information

• Company Highlights
• Recent Co-Branding Initiatives: Daimler Chrysler and Choice Hotels
• Acquisitions
• 2003 Revenue and Income
• Table 3-6: 2003 Bank of America Company-Wide Revenue and Income
• First Half of 2004
• Table 3-7: Bank of American Card Services: June YTD 2004 Revenue, by Percentage, by Type of Card
• Table 3-8: Bank of America Consumer Credit Card Financial Results
• Table 3-9: Bank of America Key Metrics: Percentage Growth Comparison: 2003 - 2004
• Table 3-10: Bank of America New Credit Card Accounts Consumer

• Merger Activity
• Card Services
• Table 3-11: Bank One Card Services Credit Quality
• Table 3-12: Bank One Card Services Other Data:
• Table 3-13: Recent Bank One Co-Branding Initiatives
• 2003
• Table 3-14: Bank One 2003 U.S. Rewards Card Account Numbers
• Table 3-15 2003 Bank One Card Volumes per Account
• Table 3-16 2003 Bank One Card Profitability, as % of outstanding

• Chase Cardmember Services: 2003 Results
• Table 3-17: Chase Financial Services Business Related Metrics
• Table 3-18: Chase Cardmember Services Revenue
• The Bank One - Chase Merger

• Global Consumer
• Cards
• Cards Revenue and Income
• Recent Acquisitions
• Sunoco Private Label Acquisition
• Acquisition of Sears’ Credit Card and Financial Products Business
• Acquisition of The Home Depot’s Private-Label Portfolio
• New Co-Branded Offering

• Morgan Stanley Credit Services Division
• 2003 Revenue and Income
• First Nine Months of Fiscal 2004
• Merchant and Cardmember Fees
• Table 3-19: Discover Credit Services Income Statement Information
• “Wal-Mart” Settlement
• Rewards Programs
• The Miles Program
• The Cashback Bonus Programs
• The Discover Gold Rewards Award

• MBNA By the Numbers
• Table 3-20: MBNA Total Revenue and Income
• Company Highlights
• Agreement with American Express
• MBNA Enters Co-Branded Brokerage Card Arena
• MBNA Enters into Multi-Partner Co-Brand Agreement
• MBNA Migrates to Variable Pricing
• MBNA Buys Sovereign Portfolio; Will Issue Its Cards
• MBNA Buys SouthTrust Portfolio; Will Issue Its Cards
• U.S. Bancorp
• Company Highlights
• 2003 Performance
• 2003 Revenue and Income
• Table 3-21: U.S. Bancorp Total Revenue and Income
• Table 3-22: U.S. Bancorp Summary Delinquency Information for Credit Card Loans
• Table 3-23: Net Charge-offs as a Percent of Average Loans Outstanding
• First Half of 2004

Chapter 4: The Market

• Market Size and Growth
  • U.S. General Purpose Payment Card Market Expands 7% in 2003
  • Table 4-1: Total Cards: Percent Increase in Number of Transactions
  • Transaction Growth
  • Rewards
  • Co-Branded Cards
  • Table 4-2: Credit Card Choices: 1999 and 2003
  
  
• Market Profile: MasterCard
  • MasterCard: 2001 to First Half 2004 Card Growth
  • Table 4-3a: 2001 MasterCard Card Growth
  • Table 4-3b: 2001 MasterCard Card Growth
  • Table 4-4a: 2002 MasterCard Card Growth
  • Table 4-4b: 2002 MasterCard Card Growth
  • Table 4-5a: 2003 MasterCard Card Growth
  • Table 4-5b: 2003 MasterCard Card Growth
  • Table 4-6a: 2004 First Half MasterCard Card Growth
  • Table 4-6b: 2004 First Half MasterCard Card Growth
  • Market Profile: Visa
  • General Facts
  • Visa Members
  • Visa: 2001 to Second Quarter 2004 Card Growth
  • Table 4-7a: Visa 2001 Card Growth
  • Table 4-7b: Visa 2001 Card Growth
  • Table 4-8a: Visa 2002 Card Growth
  • Table 4-8b: Visa 2002 Card Growth
  • Table 4-9a: Visa 2003 Card Growth
  • Table 4-9b: Visa 2003 Card Growth
  • Table 4-10a: Visa 2004 Q1 Card Growth
  • Table 4-10b: Visa 2004 Q1 Card Growth
  • Table 4-11a: Visa 2004 Q2 Card Growth
  • Table 4-11b: Visa 2004 Q2 Card Growth
  
  
• Market Profile: American Express
  • Table 4-12: American Express Selected Statistical Information
  
  
• Market Profile: Discover
  • Table 4-13: Total U.S. Card Volume: 2001 - 2003
  • Table 4-14: Total U.S. Cards in Force: 2001 - 2003
  • Table 4-15: Total U.S. Debit Card Volume: 2001 - 2003
  • Table 4-16: Total U.S. Debit Cards in Force: 2001 - 2003
  • Table 4-17: Total U.S. Credit Card Volume: 2001 - 2003
  
  
• Co-Branded Credit Card Growth
  • Table 4-18: Total U.S. Credit Cards in Force: 2001 - 2003
  • Table 4-19: Co-Branded Card Growth: 2003-2009

Chapter 5: Marketing and Product Trends

• Small Banks Make a Better Affinity Target Than Co-Brand Target
• Can Co-branded Alliances Induce Issuers to Offer Lower Fees?
• Debit Enters the Co-Brand Arena; Poised for Quick Growth
• Bank of America Tests GM Debit Card
• U.S. Bank Increases Co-Branded Debit Card Offerings
• Bank One Offers United Airlines Mileage Plus One Card
• The Chase/Continental Airlines Banking Card
• Upscale Co-Branded Cards Pushing Consumers Away From Cash and Check

• Usage and Satisfaction with Reward Cards Higher than Average
• Reward/Rebate Cards Are Less Likely to Be Used for Carrying
• Monthly Balances
• Reward Cards Continue to Dominate over Non-Rewards Cards
• Reward Offers on the Rise
• General Rewards Card Growth Outpaces Co-Brand Growth
• Still Gas Left in Rewards Growth Tank
• Co-Branded Portfolios Important to the Bottom Line
• Table 5-1: 2003 Bank One Card Volumes per Account
• Table 5-2: 2003 Bank One Card Profitability, As % of Outstanding
• Issuers per Partners Multiply

• American Express Costco Cards Set the Bar
• Retailers Unload Card Portfolios
• Opening for Co-brand?
• Private Label vs. Co-Brand
• Airline Cards Largely Weather Storm
• Bank One MILEAGE Plus Program
• Delta SkyMiles Program
• Competition from Multi-Airline Reward Cards
• The Foodservice Landscape: Starbucks Makes the First Foray into Quick Service
• Small Business a Target
• The Government Opens its Doors
• Table 5-3: The Rise in Credit Card-Based Federal Income-Tax Payments
• Where Do Rewards Fit In?

• Usage Stimulation Trends
• Enrollment Stimulation Practices
• Co-Branded Cards as “Lifestyle Choice”
• Reward Caps
• Increasing Co-Brand Distribution Channels
• Co-Brand Data Used to Gauge and Improve Co-Branded Program
• Supporting a Co-Brand Launch
• Managing a Co-Branded Card Portfolio
• Improving the Partner’s Core Business

• Co-Brand Data Creates Important Cross-Sell Opportunity
• Reward Expirations: A Win-Win Proposition for Issuers
• Tiered Reward Timeline
• Tiered Reward Choices
• Reward Incentives for Internet Shopping
• Greater Innovation and Reward Redemption Choices
• Tiered APR
• Fees are Rising
• Annual Fees
• Tiered Late Fees
• Tiered Balance Transfer Rates
• Tiered Annual Fees
• Simple Card Versatility and Convenience Reduces Cards in Wallet
• The Coming Convergence of Card Products

• American Express
• Delta SkyMiles Credit Card
• Platinum
• Gold
• Classic
• The American Express Costco TrueEarnings Card
• American Express Costco Cash Rebate Credit Card
• Hilton HHonors Platinum Credit Card
• Starwood Preferred Guest Credit Card

• Debit Card
• US Airways Visa Check Card
• Credit
• US Airways Visa Signature

• Debit Card
• United Mileage Plus THE ONE Card
• Credit Cards
• United Mileage Plus Visa Signature Card
• British Airways Visa Signature Card
• Disney's Visa Card
• Starbucks Card Duetto Visa
• Trump Rewards Visa
• Amazon.com Platinum Visa Card
• Sony Card

• Marathon Platinum MasterCard
• Universal Entertainment MasterCard
• Continental Airlines World MasterCard

• Debit Card
• Citibank/AAdvantage Debit Card
• Credit Cards
• The Citi/AAdvantage Card

• Aer Lingus Shamrock Rewards MasterCard
• Royal Caribbean Visa Card
• Barnes & Noble MasterCard

• Debit card
• The WorldPerksVisa Check Card
• Credit Cards
• WorldPerks Visa Platinum Card
• The SKYPASS Visa Platinum Card
• ATA Visa Platinum Card
• Gymboree Visa Platinum Card
• Harley-Davidson Visa Card
• The NAPA Visa Card
• Table 5-4: Breakdown of Selected Co-Branded Airline Cards
• Table 5-5: Breakdown of Selected Co-Branded Airline Cards
• Table 5-6: Breakdown of Selected Co-Branded Airline Cards
• Table 5-7: Breakdown of Selected Co-Branded Cards: Travel, Gas, Shopping, and Entertainment
• Table 5-8: Breakdown of Selected Co-Branded Cards: Travel, Gas, Shopping, and Entertainment

Chapter 6: Advertising

• Media Spending Trends
• $901.9 Million Spent on Television and Print Advertisements in 2003
• Television Receives the Lion’s Share
• Focus on MasterCard
• MasterCard Print Ad Roll-Out
• Co-branding Seen as Key
• Internet Advertising on the Rise
• Telemarketing
• Table 6-1: 2003 Top 15 Card-Industry Telemarketers*
• Table 6-2: 2003 Top 15 Card-Industry Telemarketers: Hours, Sites, and Stations
• Table 6-3: 2003 Top 15 Card-Industry Telemarketers: Employees
• Table 6-4: 2003 Top 15 Card-Industry Telemarketers: Revenue
• Direct Mail
• Marketing Efforts - 2nd Quarter 2004
• Interest Rate Concerns Drive the Upswing
• Rewards Offers on the Rise
• Table 6-5: Rebate/Reward Offers, Mail Volume Estimates, Q1 2003 Through Q1 2004
• Marketing Efforts - 1st Quarter 2004
• Table 6-6: Special Introductory Rate Offers, Mail Volume Estimates Q1 2003 Through Q1 2004
• Lower Annual Percentage Rates
• Reward Mail Volume
• Table 6-7: Reward and Rebate Mail Volume Estimates Q1 2003 Through Q1 2004
• Use of Promotional Cards
• Stopping the Pitch

Chapter 7: Consumer

• Note on Simmons Market Research Bureau Data
• Ownership and Use of Credit Cards
  • Data Presented for 12 Co-Branded Cards
  • Approximately 70% of Adults Have/Use Credit Cards
  • Table 7-1: Consumer Ownership and Use of Co-Branded Credit Cards by Type, 2004
  • Credit Card Holders: Older, Well Educated, Financially Secure,
  • Married Homeowners
  • Table 7-2: Demographic Characteristics Favoring Ownership and Use of Credit Cards*
  • Frequency of Use
  • Table 7-3: Demographic Characteristics Favoring Ownership and Use of Credit Cards: Used Last 12 Months
  • Table7-4: Demographic Characteristics Favoring Ownership and Use of Credit Cards: Used Last 30 Days
  • Co-Branded Visa Credit Card Holders
  • Factors Differentiating Co-Branded Visa Users from Average Visa Users
  • Airline/Hotel Co-Branded Cardholders: Older,
  • More Upscale, Homeowners
  • Automotive Visa Skews to Middle Income,
  • Oldest Age Group, Midwest
  • Automotive Co-Branded Cardholders: Male and Middle-Income - with a Larger Family
  • Other Important Factors
  • Younger Consumers Well Represented Among Automotive and Affinity Card Holders
  • Asian American and Black American Usage
  • The Marital Factor
  • Table 7-5: Demographic Characteristics Favoring Ownership and Use of Co-Branded Visa Cards
  • Co-Branded Mastercard Credit Card Holders
  • Factors Differentiating Co-Branded Mastercard Users from Average MasterCard Users
  • Airline/Hotel Mastercard Holders: Condo-owning Males
  • Automotive Mastercard Skews to Middle Income,
  • Oldest Age Group, Midwest
  • Mastercard Affinity Card: Diffused Geographical Coverage
  • Other Factors
  • Table 7-6: Demographic Characteristics Favoring Ownership and Use of Co-Branded MasterCard Cards
  • Co-Branded Discover Credit Card Holders
  • Factors Differentiating Co-Branded Discover Users from Average Discover Users
  • Airline/Hotel Discover Holders: Divorced Asian Americans with Five or More Children and Minimal Education
  • Automotive Discover Skews to Middle Income Asian Americans
  • Discover Affinity Card—Younger and More Affluent
  • Other Factors
  • Table 7-7: Demographic Characteristics Favoring Ownership and Use of Co-Branded Discover Cards
  • Co-Branded American Express Credit Card Holders
  • Factors Differentiating Co-Branded American Express Users from Average American Express Users
  • Airline/Hotel American Express Holders: Affluent Asians and Whites with Young Children
  • Automotive American Express Skews to Asian and Black Americans, Singles, and Midwest1
  • American Express Affinity Card—Younger/Middle Aged, West
  • Table 7-8: Demographic Characteristics Favoring Ownership and Use of Co-Branded American Express Club Cards

Chapter 8: Legal

• The “Wal-Mart” Settlement
• To What Did the Associations Agree?
• The Visa and MasterCard Exclusionary Rule
• Immediate Consequences
• Discover Lawsuit and Partnership Plans
• American Express Lawsuit and Partnership Plans
• The Telemarketing Sales Rule (TSR)
• Introduction
• Who Must Comply with the Amended TSR?
• Exemptions to the Amended TSR
• Some Types of Businesses and Individuals
• Exemptions Explained
• Upsells
• Most Calls Made in Response to a Catalog
• The National Do Not Call Registry Provision
• How the National Do Not Call Registry Works
• What types of calls are covered?
• What types of calls are not covered by the National
• Do Not Call Registry?
• If a call includes a telephone survey and a sales pitch, is it covered?
• Recent Amendment Requires Telemarketers to
• Scrub Lists Every 31 Days
• Do-Not-Call Registry Not a Violation of Telemarketer’s Free Speech
• "Over-Limit" Fees Not Finance Charges, Supreme Court Says
• Details of the Ruling
• Meaning of “Finance Charge”
• Result of Ambiguity
• Effect of Ruling
• Prescreen Opt-Out Disclosure Rules Proposed by FTC
• Federal Reserve Examines Safety of Credit Offers
• Kmart—Capital One Litigation

Chapter 9: Affinity Cards

• New Concepts In Affinity Program
• Basic Operational and Financial Arrangements
• Small Banks Make a Better Affinity Target Than Co-Brand Target—But Market Appears Tough-Going
• The Issuers Fight Back
• Reward Add-Ons: Bank One’s “Flexible Rewards Select” Program
• Citi Upromise MasterCard Incentives Increase
• New MasterCard Rewards Program Converts Loyalty Points into Donations for Nonprofits and Schools
• More Affinity Cards in Larger Issuers’ Portfolio in 2003
• Table 9-1: Table Credit Card Issuers Ranked by Total Affinity Cards Issued 2003
• Affinity Profit and Volume Synopsis
• Table 9-2: 2003 Card Volumes per Account
• Table 9-3: 2003 Card Profitability, as % of outstanding
• Recent Activity Among Brands
  • MBNA
  • Providian
  • U.S. Bank
  • First National Bank Omaha
  
  
• Market Size and Growth
  • Table 9-4: Total U.S. Credit Cards in Force: 2001 - 2003