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Barnett reviewing credit card business

Barnett Banks Inc. is reviewing its credit-card business, a division trying to cope with an increasing number of customers who aren't paying their bills.

The review could lead to a variety of options for the Jacksonville-based bank, including: no changes, a joint venture with another company, or a sale of its $1.7-billion card portfolio.

"Word is slowly getting around that we are reviewing the line of business," said Gordon Turner, a Barnett spokesman. "We are trying to decide if it is headed where we want it to go."

For the second quarter, the bank's charge-off rate on its credit cards was well above industry average. It was 6.47 percent, up from 2.52 percent in a similar period a year earlier. That is the percentage of outstanding credit card debt that the bank has determined to be uncollectible.

Other banks also have been reviewing their credit card lines because of competition and rising delinquencies as more people file personal bankruptcies. For example, Minneapolis-based Norwest Corp. sold nearly half of its credit-card portfolio earlier this year.

Barnett's Turner, who wouldn't speculate on what the bank will do, underscored that Barnett "wants to meet all of its customer needs." He added that the review likely will be completed in late September.

American Banker, a trade publication that covers banking, reported Thursday that a number of observers are betting that Barnett will choose to enter a joint venture with another company, which would allow the company to retain ties to customers but also reduce its risk.