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QVC first teleshopper to sponsor own Mastercard, Visa credit cards
Arthur MarkowitzQVC First Teleshopper to Sponsor Own Mastercard, Visa Credit Cards
QVC has gotten a jump on its two larger teleshopping competitors by sponsoring its own MasterCard and Visa credit cards.
The move strengthens QVC's marketing posture as consumers using the cards to make purchases at any retailer, not just the teleshopper, receive bonus points toward the purchase of QVC goods.
The cards will carry the QVC logo, as well as either the MasterCard or Visa mark. The financial backer will be M.B.N.A., which is the world's leading issuer of the Gold MasterCard.
M.B.N.A., which will assume all the credit risk, is the national financial service subsidiary of MNC, a $15 billion Wilmington, Del.-based bank holding company owned by the Maryland National Bank.
QVC expected to have credit cards in its customers' hands "in time for the holiday buying seasons,' chairman Joseph M. Segel said. The credit cards "will add an attractive element to the overall convenience of home shopping, and we expect it to further spur our rapid growth.'
No date has been set for the mailing of credit card applications, but it will likely occur this month. Forms will be sent to people who, a spokesman said, have "pro-actively' contacted QVC. These include its approximately 400,000 customers, growing at the rate of 10,000 per week, as well as cable TV viewers who haven't shopped QVC but who have participated in its game shows.
This selective mailing denotes the value of the mailing lists, and the inherent demographic information they contain, that teleshoppers are developing from their programs. QVC is targeting its credit card to consumers who have bought its goods or are interested in its service. They will, therefore, have the greatest incentive to accept and use the QVC credit card to gain bonus points to offset future purchases from the teleshopper.
Home Shopping Network, the leading teleshopper and owner of a Maryland financial institution, and CVN Co., the second largest video retailer, have also indicated they plan to sponsor credit cards, but neither has yet done so.
The QVC credit card can be used to buy goods from the teleshopper, as well as for purchases made at any of the seven million firms that accept MasterCard and Visa cards. About 50 percent of the applicants are expected to qualify for a credit line of up to $5,000.
QVC will give one bonus point for each dollar charged to its credit card, regardless of where the goods were bought. The bonus points, however, can only be redeemed for QVC purchases. Each point equals a 1 cent merchandise credit.
QVC said its credit card offers such benefits as no annual fee for the first year; no liability for lost or stolen cards; travel, accident and lost luggage insurance; cash advances; preferred access check-writing privileges; and a lower-than-average interest rate, yet to be determined by MNC Financial.
QVC will continue to accept the six other major credit cards, MasterCard and Visa issued by any bank, American Express, Discovery, Diner's Club and Carte Blanche. The teleshopper also accepts Sears own card, but only for the Sears goods that it sells.
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