The Associated Press
NEW YORK - American Express announced its first deal Thursday to allow a major American financial institution - MBNA Corp. - to issue its credit cards in the United States.
American Express said MBNA will issue American Express-branded credit cards starting later this year, allowing the company to reach a much larger potential customer base. New York-based American Express will also continue to issue its own cards.
No financial terms were disclosed.
The alliance was made possible by a 2001 ruling in an antitrust case brought by the Justice Department. A federal court in Manhattan ordered Visa and MasterCard to drop rules that prohibited their member banks from also issuing American Express and Discover cards. Legal appeals by Visa and MasterCard have all been rejected.
MBNA already issues Visa and MasterCard credit cards. As a result of the alliance with American Express, it will become the nation's first financial institution to participate in all three major card networks.
MBNA, based in Wilmington, Del., bills itself as the nation's largest independent issuer of credit cards, many of them distributed through professional and university affinity programs.
According to data from CardWeb.com, American Express is the top card issuer by charge volume in the United States, with a 12.4 percent market share at year's end. Citibank is second at 11.7 percent, and MBNA is third at 8.7 percent. When ranked by outstanding balances, the Citibank portfolio is on top, followed by MBNA and Bank One.
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