Citibank is hoping its issue of a new credit card offering cash rebates for new cars will help drive customers to its retail banking operations.

A key part of the unveiling of its Driver’s Edge Visa card is the largest integrated marketing campaign the New York-based banking giant has undertaken in Canada.

The no-fee card is unique in Canada. It offers up to $2,500 in cash rebates over five years on the purchase or lease of any new car bought in Canada. The rebate is available for any make or model ranging from a $100,000 Ferrari to a $10,000 Dodge, setting it apart from affinity cards, such as the TD GM card, that offer cash-back only on the purchase of cars from a specified auto maker.

The campaign will feature freestanding ads by Toronto-based Young & Rubicam under humourous headlines such as: ‘Is that a 4 x 4 in your pocket?’ The ads, to be rolled out over the next few months, will be featured in magazines and daily newspapers across Canada, says Barry Columb, Citibank’s vice-president of marketing.

A direct marketing campaign by Toronto-based Wunderman Cato Johnson is set to begin in late January with follow up telemarketing to begin in February.

The campaign should generate at least six million impressions, Columb says.

Once the cards have established themselves in the market, Citibank will begin using the customer database generated by the card to market other Citibank services such as car loans, Columb says.

‘We know the people who are getting these cards are most likely looking to purchase a new car in the next five years,’ he says. ‘With that in mind, they will likely be more receptive to receiving information about the financing options we can offer them.’

This is the third credit card to be issued by Citibank since it opened its retail banking operations in Canada in the mid-’80s. Citibank has concentrated mainly on serving the Asian market niche, locating its retail branches in Vancouver and Toronto Chinatowns.

The bank saw annual growth of about 10% per year until the handover of Hong Kong to China when growth flattened, says Sue Harnett, president of Citibank Canada.

While Canadians continue to have a love-hate relationship with the big six Canadian banks, it’s extremely difficult to convince them to switch, particularly to a foreign bank, says Charles Stuart, a partner and banking analyst at Ernst and Young and, until June of 1998, Citibank’s country business manager.

‘There are no obvious products missing from the big Canadian banks for foreign banks to move into and find a niche,’ he says.

Using credit cards to market banking services may be an effective strategy for the bank, he says, since customers are less nervous about switching credit card issuers than banks.

While the banks heavy-handed behavior during its recent failed merger drive has increased some ill will on the part of the general public, foreign banks are unlikely to be able to capitalize on it, Stuart says. While people are searching for alternatives to the big banks, they generally look to homegrown trust companies and credit unions.

Citibank currently controls about 2.5% of the credit card business in Canada. In total, foreign-owned banks such as Citibank, ING Direct and Hongkong Bank of Canada account for about 12.5% of the Canadian banking market.