Citibank is about to introduce a new credit card, sources said Wednesday, with an unusual partner: Apple Computer Co.
The card follows a trend toward credit card issuers teaming up with non-banking companies, such as General Motors Corp. and American Airlines, to expand their credit clientele and encourage spending.
Banking and computer industry sources said Apple and Citibank, the nation’s largest credit card issuer, will unveil a co-branded credit card at a news conference today at Citibank headquarters here. The sources spoke on condition of anonymity.
James Daly, editor of the Chicago-based Credit Card News, said industry officials told him that an Apple-Citibank card was in the wings.
“It’s definitely going to be a co-branded card with Apple Computer,” Daly said.
Neither Citibank nor Apple, which is based in Cupertino, Calif., would comment on the news conference. James Bailey, the head of Citibank’s credit card operations, will be on hand for “a major new product development,” the bank said.
The card could help Apple at a time when sales growth is waning. The company suffered its biggest loss in the second quarter and is undergoing a restructuring that will eliminate 2,500 of 16,000 jobs.
Apple wants to build stronger ties with customers as it begins to market hand-held devices that are part computer and part telephone.
Eric Lewis, manager of PC hardware research at International Data Corp. in Mountain View, Calif., said an Apple-Citibank card would be a good idea.
“It would be an innovative marketing tool in the computer industry to tie credit card purchases to discounts on a computer,” Lewis said. “That would be a new trick. Apple has had a historical strength in the home market, and this would tie in nicely.”
Few details were available on the card, which reportedly will carry both the Visa and Mastercard brands and be structured similarly to Citibank’s co-branded card program with Ford Motor Co.
Apple shares fell 87.5 cents to $23.875 on the Nasdaq, just above the 1993 low of $23.50. Citicorp added 25 cents to $38.125 on the New York Stock Exchange. The Ford card, unveiled in February, offers rebates equal to 5% of purchases up to a maximum of $700 a year. Citibank, which is secretive about its credit card programs, refused to release information about that card except to say it has been successful.
Ford spokesman Thomas Rhoades said the credit card has attracted new car buyers. Customers had accumulated $250 million worth of rebates by the end of August, he said.