Reader's Digest, First USA in Credit Card Marketing Pact

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The Reader's Digest Association Inc., Pleasantville, NY, yesterday unveiled an agreement with First USA that will allow the Charlotte, NC, financial services marketer to offer Reader's Digest-brand credit cards to Reader's Digest customers.


The companies would not discuss the specific terms of the agreement, although Stephen J. Morello, a Reader's Digest spokesman, said the publisher and direct marketer expected to receive revenues from the deal in both fixed and variable components.


David Webster, a spokesman for First USA, said partners in the company's affinity programs typically receive a percentage of each transaction made on the cards and a fee for each new cardholder that First USA is able to sign up. First USA's other publishing partners include Forbes, Golf Magazine, Hispanic Publishing, The Nation and Time Life.


The partnership marks the first time Reader's Digest has ever placed its brand on a credit card. Morello said that although First USA would handle the marketing of the cards, Reader's Digest probably would participate by including marketing materials in mailings to its customers and within its own media vehicles. He said the first offers would be mailed during the current fiscal year, which ends next June.


The agreement follows several other marketing agreements that Reader's Digest has unveiled during the past few weeks, including two insurance-marketing alliances and some Web-based initiatives.


Marta Nichols, an analyst at investment firm Donaldson Lufkin & Jenrette, San Francisco, said she expected the company to announce yet another insurance-marketing program very soon.


"It's something that has generated profitability for them in the past," she said. "And they've had a number of partners who have been interested in having access to their customer list."


Reader's Digest, which has a database of 50 million names, said earlier this year that it planned to broaden its product and service offerings within the areas of "home, health, finance, family and faith."
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