Charge It on the Huntington Card?

Huntington Beach residents soon might get access to another credit card, one that would let them raise funds for local parks or libraries.

On Monday, City Council members will discuss, and possibly approve, a plan to join forces with the corporate world and launch a city credit card program.

Ron Hagan, director of community services, said the program has proved very successful at the college level, with such universities as USC and UCLA offering the cards, and there is reason to believe it will be successful here.

“We’re hoping that a grass-roots effort at the beach, library and city shops will interest residents in the card,” Hagan said. “The idea we’re working under is that most Huntington Beach residents are very loyal to the community and would enjoy having a Surf City credit card.”

City officials expect that about 35,000 people would sign up for the cards.

The city would make $2 per credit card in sign-up and annual fees, and would take 0.5% in revenue from each retail transaction.

For example, if 35,000 residents apply and use the credit card, the city will make $70,000 to use to market the card to more potential users. If each of those cardholders spends $8,000 annually, the city would make $1.4 million in revenue, which would be parceled out to agencies to benefit park, culture and library programs.

That’s a conservative estimate, city officials said, since cardholder studies have shown that shoppers spend about $11,000 a year in the city.

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Several other cities around the country have started their own credit cards.

In 1995, Culver City put its name on a credit card issued by a local bank; in return, the city received part of the interest on card balances. But the city never made money on it, said Eric Shapiro, city controller. “We got rid of it in 1997,” he said. “Two years was about it.”

Shapiro said part of the reason the city abandoned the card was that the issuing bank, Culver National Bank, was acquired by a larger institution, which was later acquired by an even larger one. “The local connection just wasn’t there anymore,” said Shapiro. “If it had stayed local, I think the bank would have absorbed some losses, but there just weren’t any roots anymore.”

Hagan said 60% of the card revenue would be equally distributed for park acquisition and development, city culture and the library system. About 10% would go to an incentive fund to support frequent flier miles or other card-associated perks, and 25% would flow into the city’s general fund. The remaining 5% would go to a city agent to manage contracts between the city and its financial partners.

If approved, the credit card could provide a long-term revenue source for the city, could increase tourism potential, and provide a potential marketing and promotions partner.

“I think it’s a novel approach to fund-raising and really quite clever,” said 23-year resident Frank Reynolds. “I know that whenever I send out an e-mail, I always tag on Surf City USA, so people will know where I’m from. This could add to that.”

Reynolds likened such a city-bank partnership to the city’s 10-year deal with Coca-Cola as a city sponsor, which began last year.

The city sent out 22 requests for proposals to financial institutions, such as Capital One, Citibank and Bank of America. Three sent back letters of interest and a couple sent rejections, city officials said.

Times staff writer Matthew Ebnet contributed to this report.