Chicago-based Bank One Corp. on Tuesday officially launched its co-branded rewards credit card with Walt Disney Co. and Visa International, the latest in a series of rewards programs that started in the 1980s with frequent-flier mileage cards.
Bank One Chief Executive Jamie Dimon said the companies have already received nearly 100,000 preregistration cards from consumers based on minimal prelaunch publicity.
"This is an outstanding program for consumers, and it's important for our future, too," Dimon said in an interview.
Important, indeed. The bank's other major credit card rewards program, Mileage Plus, is with bankrupt United Airlines, and that program accounts for a big portion of Bank One's earnings from credit-card operations.
The United rewards program is still active and the carrier is still flying, but any company's future is murky in bankruptcy, and industry experts who follow the bank have expressed concern about its United exposure.
It's also important for the bank to try to steal market share away from other cards in the burgeoning rewards industry.
"I think Dimon would be doing this anyway, but it's certainly not going to hurt [to have the new card] if the Mileage Plus program crash-lands," said Jim Daly, editor of Credit Card Management, a Chicago-based industry publication.
But it will take a lot of marketing muscle to build the card into an earnings machine like the United card. Frequent-flier cards are among the few remaining that can command an annual fee.
The new Disney card has no annual fee, pays 1 percent back in the form of Disney dollars for a rebate on company merchandise at any retail store that takes Visa cards and offers other discounts and giveaways at Disney theme parks and hotels.
Credit industry players say the popularity of these cards waned in recent years as companies put more resources into wooing subprime customers. With defaults rising, they say, rewards programs geared to people with good credit may make a resurgence.
"This may be the first big program out of the gate in a new era of focus on prime quality customers," said Stuart Feldstein, president of SMR Research Corp., an industry consultant.
The big marketing campaign, which involves Chicago's Leo Burnett Worldwide and two other advertising firms, features kids begging their parents to buy more vegetables or take them to the gas station to earn enough Disney points to get to the Magic Kingdom.
"You don't want to know what I had to do to get here," one little girl tells Mickey Mouse at the end of one television spot, Dimon said.
Though probably true to life, the idea of the campaign doesn't sit well with Stephen Goldbart, co-director of a San Francisco think tank that studies the impact of American consumerism.
"It raises the old issue of who's driving the family bus," Goldbart said. "We think it should be somebody over the age of 18."