American Express Co. on Monday took a swipe at AT&T's popular Universal credit card with a broad new marketing strategy that enables customers to easily charge calls using the MCI and Sprint long-distance companies. The "Connect Plus" package lets cardholders make long-distance calls by punching in their account number and offers 10 percent discounts on most MCI and Sprint calls made using the American Express card.
The program, fully available to Sprint users Thursday and MCI users Jan. 1, is the latest response by AT&T's unexpectedly successful entry into the credit card business last March.
Since AT&T began offering Visa and MasterCard services to customers _ with a 10 percent discount on all charged long-distance calls _ the long-distance phone giant says it has opened about 3.6-million Universal accounts and distributed about 6-million cards.
With 70-million long-distance customers, AT&T's entry into the highly competitive and profitable credit card industry has raised fears among U.S. banks and financial companies that they could lose business.
By adding the convenience of long-distance calling to existing services, the companies are hoping to simply retain customers, observers say.
In June, Citibank, the nation's largest credit-card issuer, enlisted MCI to help launch a competitor to AT&T's card. The cards allow users to charge long-distance telephone calls via Visa or MasterCard.
American Express, trying to differentiate itself, said a key advantage of "Connect Plus" is that full details about MCI and Sprint long-distance telephone calls, such as date and number called, show up on the cardholder's monthly bill.
Billings for Visa and MasterCard programs show total phone charges as a one-line item, but MCI subsequently sends callers separate bills that itemize calls.