Chase Offers Credit Card to Pay Off Others’ Perks

Chase Manhattan Bank unveiled an offer Wednesday that allows credit card users to rack up frequent flier miles and other awards on competitors’ cards, then pay them off quickly with credit from Chase.

The offer would allow consumers to reap the perks of some cards while avoiding higher interest rates. The idea is for people to gain the benefits of free airline tickets or discounts on new cars with one card, then transfer the balances to a Chase line of credit.

Chase charges 11.1% interest and no annual fee for its credit.

“It’s one of the most novel pirating schemes of 1994 that I’ve heard of,” said James Daly, editor of Chicago-based Credit Card News, a trade publication.

Credit card companies in recent years have offered incentives to encourage cardholders to transfer balances from their old cards to new offerings. The Chase program takes that concept a step further by issuing checks pre-printed with the names of the competing “rewards cards.”

John A. Ward III, a Chase executive vice president, said the idea arose from customer research, which showed that cardholders “like to keep the rewards but want to get a better rate.”

Ward said he wouldn’t call the offer piracy.

“I’d like to say we’re offering the customer a better deal,” he said.

The new product is aimed at the most credit-worthy cardholders.

Daly said the idea would appeal most to holders of the GM Card, which offers cash toward the purchase of most new GM model vehicles, because those cards carry sizable monthly balances.