Lackland Air Force Base, Texas —
Current and future members of the Gateway Club will be given a choice of a MasterCard credit card or an Air Force Services card with a maximum $500 credit limit in a six-month test program starting Jan. 1 at Air Education and Training Command bases.
"It's in response to a request from military members that they would like to have a choice, instead of just automatically receiving the credit card," said Chuck Mullins, general manager of the Gateway Club. He said some members wanted a card that doesn't automatically report that they have a credit card and its credit limit to credit bureaus.
Some also did not want the bank arbitrarily setting their credit line up to $10,000 and reporting to credit bureaus that they have that amount of credit available, whether they choose to use it or not.
Credit bureaus will be notified by Chase Bank regarding the new card only if the holder defaults on account payment. Club members now have the MasterCard, but they can apply to switch to the proprietary card Jan. 1. Mr. Mullins said the MasterCard will be closed, but members can pay any remaining MasterCard balance in minimum payments if they wish. Unpaid balances cannot be switched to the new card.
If members switch to the new club card, he said, they will only be able to use it in Services facilities on military bases, such as clubs, bowling centers, golf courses, hobby shops and community centers.
Unlike the MasterCard, it can't be used anywhere else, such as the base exchange or commissary, and there will be no Chase Bank awards for using the card in Services facilities. There will be no cost to switch to the new card. Club dues will be charged automatically to the account.
No interest will be charged if accounts are paid in full within 25 days of the billing date. The annual percentage rate on balances may be no more than 5 percentage points above the prime lending rate.
The card is identical to the current Chase Bank club card, depicting four Air Force Thunderbirds on the front, except it doesn't have the MasterCard logo. "Based on the final result from a six-month test, the bank will either adopt the program and keep it, or modify the current program," Mr. Mullins said.