NationsBank announces save-as-you-spend card

January 07, 1993|By Ellen James Martin | Ellen James Martin,Staff Writer

NationsBank Corp. and a Virginia company announced yesterday that they have jointly created a consumer card that will reward consumers for purchases made with a select group of U.S. retail companies.

The Baltimore-Washington market was one of three metropolitan areas where the save-as-you-spend card, known as START, began its test-marketing yesterday. The other markets are Columbia, S.C., and Houston.

NationsBank has 19 branches in the Baltimore area, said Ellison Clary, a NationsBank spokesman. The bank, based in Charlotte, N.C., holds a minority interest in MNC, the bank-holding company that owns Maryland National Bank. NationsBank has an agreement allowing it to take control of MNC at any time through 1997.

The START "frequent saver" program will reward members for their cash expenditures with either cash rebates or contributions toward a tax-deferred annuity, to equal 1 percent to 7 percent of expenditures. Among the companies that have signed on to the program are Hertz, Eddie Bauer, Club Med, MCI and Spiegel.

"We hope this will be a hit, but time will tell," said Miles Coffman, NationsBank's consumer banking manager in Baltimore. Applications for START memberships -- which require a one-time $25 membership fee -- became available at all NationsBank branches in the Baltimore area yesterday.

The program is expected to expand nationwide in the spring.

Although NationsBank and the co-sponsor of the START frequent saver program, START Inc. of Herndon, Va., said the program was a way to encourage Americans to save for the future, Stephen Brobeck, executive director of the Consumer Federation of America, based in Washington, said he was not impressed.

"It's a marketing gimmick," Mr. Brobeck said.

Mr. Brobeck predicted that retail companies in the START network will ultimately charge more for products or services to make up for the costs of participation. He said consumers would be better off using a savings vehicle separate from their purchases.

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