Providian Moving to Lower the Risk

Providian Financial Corp., whose stock fell 94% last year, wants to attract more reliable credit card customers by lowering interest rates, revamping its frequent-flier program and adding pictures to its plastic, said the company’s new marketing head.

“If you don’t have an attractive product and you don’t have it priced in an attractive way, that’s an equation for trouble,” said Warren Wilcox, vice chairman of planning and marketing. “We’ll be more in sync with what the smartest competitors in our market are doing.”

The seventh-biggest U.S. issuer of Visa and MasterCard added millions of customers with poor or short credit histories in recent years, charging them as much as 23.99% interest for a basic card. As the economy soured, many clients couldn’t pay their bills.

Shailesh Mehta, who ran the San Francisco-based business since 1988, resigned in October and was replaced by Joseph Saunders, the former head of FleetBoston Financial Corp.’s credit card unit.

Saunders brought in Wilcox, who had worked with him for more than 15 years.

Wilcox said he wants to take on competitors such as Capital One Financial Corp. and Discover Financial Services, owned by Morgan Stanley Dean Witter & Co. In some cases, rivals are charging customers 2 to 3 percentage points less than Providian for similar cards, he said, although he declined to specify how much the company will change rates.

Providian may boost its rewards program, in which clients accrue points that can be used toward travel on any airline, and put landscape photos or other designs on cards that are currently solid colors, Wilcox said.

It also may sell installment loans, which it has never offered before, or lines of credit, last available in 1995, he said. Lines of credit allow customers to borrow by writing checks.

“We need to have a broad and potent product array,” said Wilcox, 44, who was at Household International Inc. for 12 years before taking a job as executive vice president of planning and development at FleetBoston in 1998.

Providian stumbled in its previous attempts to appeal to so-called platinum customers, those with the best track record for paying bills, Wilcox said.

The company plans to send out improved direct-mail appeals to these types of consumers in the second quarter.

Providian shares closed Monday at $4.55, up 51 cents, on the New York Stock Exchange.