Officials moving ahead with Surf City credit card

Tariq Malik

HUNTINGTON BEACH -- Surf City residents may soon see their community’s

image emblazoned on a credit card, with a picturesque sunset or the

city’s logo accompanying each transaction.

City officials are moving forward with a plan to join forces with the

corporate world and give residents the chance to shop for the city, with

a portion of each retail dollar going toward local programs.

Ron Hagan, director of community services, said the program has proven

very successful at the college level, with universities like USC and UCLA

offering the cards, and there is reason to believe it will be successful

here.

While city officials hope to sign up 100,000 residents with the new

cards, a turnout of about 35,000 is expected, they said.

“We’re hoping that a grass-roots effort at the beach, library and city

shops will interest residents in the card,” Hagan said. “The idea we’re

working under is that most Huntington Beach residents are very loyal to

the community and would enjoy having a Surf City credit card.”

The city would make $2 per credit card in sign-up and annual fees, and

would take 0.5% in revenue from each retail transaction dollar.

For example, if 35,000 residents apply and use the credit card, the

city will make $70,000 to use to market the card. If each of those 35,000

cardholders spend $8,000 annually, the city would make $1.4 million in

revenue, which would be parceled out to agencies to benefit park, culture

and library programs.

Hagan said 60% of the city’s revenue would be equally distributed for

park acquisition and development, city culture and the library system.

About 10% of the new money would go to an incentive fund, that would

support frequent flier miles or other card-associated perk, and 25% would

flow into the city’s general fund. The remaining 5% would go to a city

agent to manage contracts between the city and its financial partners.

If the credit card effort moves forward, it would also provide a

long-term revenue source for the city, could increase tourism potential

and provide a potential marketing and promotions partner.

“I think it’s a novel approach to fund-raising and really quite

clever,” said 23-year resident Frank Reynolds. “I know that whenever I

send out an e-mail, I always tag on Surf City USA, so people will know

where I’m from. This could add to that.”

Reynolds likened the partnership between Surf City and corporate banks

to offer the credit cards to the city’s 10-year deal with Coca-Cola as a

city sponsor, which began last year.

The city sent out 22 requests for proposals to various financial

companies, such as Capital One, Citibank and Bank of America. Three sent

back letters of interest and a couple sent denials, city officials said,

adding that the program should appear before City Council on Monday for

the final go-ahead before a deal can be made.