Bank One to Buy Wachovia’s Credit Card Unit

Bank One Corp. agreed to buy Wachovia Corp.’s $8-billion credit card portfolio, making the bank’s First USA Inc. unit the No. 2 card issuer behind Citigroup Inc. Bank One didn’t disclose the purchase price of the portfolio, which has about 2.8 million customer accounts. Chief Executive Jamie Dimon said he expects a cost savings of $100 million from the deal. He didn’t say how many of Wachovia’s 1,400 credit card employees would be offered jobs. Bank One wants to bolster its ailing credit card business, which was a drag on its profit. First USA has lost millions of customers since 1999, when it gave them less time to pay their bills and raised interest rates for those who missed the deadlines. Those changes, and the unit’s earnings problems, spawned several lawsuits. In 2000, the unit posted a $1-million loss. Dimon said he plans to add $100 million this year to First USA’s marketing budget to win back customers. Winston-Salem, N.C.-based Wachovia said it will have a $1.4-billion gain when the transaction closes. Shares of Chicago-based Bank One rose 84 cents to close at $34.45, while Wachovia rose 60 cents to close at $58.95, both on the New York Stock Exchange.