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JPMorgan Plots to Revive Credit Card Business

"When you get right down to the heart of it, credit cards just make consumers and businesses lives easier," says Gordon Smith, CEO of Chase Card Services, in an interview this week with TheStreet.com. "That's why we think if we build the right products and services this is a terrific space to be in. ... Consumers and businesses are so busy today. The successful businesses take that complexity away."

Besides JPMorgan, Bank of America (BAC), Citigroup (C), Wells Fargo (WFC), American Express (AXP) are also looking for ways to position their card businesses for the changing business environment.

But JPMorgan is taking a different tact than just fees and higher interest rates, choosing instead to put the bulk of its efforts behind new product offerings that it hopes will result in the card business being in prime position to benefit when the fallout from the financial crisis has finally subsided.

The company is targeting five distinct customer segments for card usage -- high-net-worth consumers, mass affluent consumers, small business owners, co-branded cards and retail partner/private label credit cards.

As part of the effort, JPMorgan is looking to leverage its existing relationships with Disney (DIS), Continental (CAL), United (UAUA), Southwest (LUV) and Marriott (MAR), among others, for co-branded cards, as well as its deals with retail partners such as Starbucks (SBUX), Pier 1 Imports (PIR) and Toys R' Us (TOY).

An early example of the strategic direction was the launch of the company's Chase Sapphire card series in August, whose ubiquitous advertising campaign featured the unmistakable voice of Frank Sinatra singing the standard "The Way You Look Tonight" in the background. The card targets the top 15% of U.S. households, who are large users of credit cards that expect "premium rewards, outstanding value and exceptional service," the firm says.

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