The state of California is in debt by as much as $38 billion, one reason that voters there could decide in a special election this month to make movie tough-guy Arnold Schwarzenegger their next governor. Even Malibu, the famed beachfront home to the stars, is hurting for revenues. But instead of turning to the Terminator, Malibu officials went to a credit card for help.
  U.S. Bank announced this August that it is now issuing the Malibu Visa credit card in platinum and standard versions. City Treasurer Peter Lippman believes the cards will bring Malibu a lot of gold for the public schools, which need about $2.5 million for after-school programs.
  Lippman says Malibu will receive $20 for every card issued and 0.1% of the cards' annual purchases. The card could raise $500,000 the first year if U.S. Bank issues 5,000 cards and cardholders charge an average of $8,000.
  Some might say that sounds ambitious. Lippman disagrees. "In Malibu? Are you crazy?" he asks. According to the U.S. Census Bureau, Malibu's median household income was $102,000 in 1999.
  Lippman cites his family's spending habits to illustrate those of all of Malibu's 12,800 residents.
  "My wife and I charge $3,000 a month on our cards. We pay for everything with our cards."
  The Malibu card could be on the crest of a wave of fund-raising affinity cards for public entities. Other cities, a state, and a business that works closely with Las Vegas offer credit cards to promote interest in their areas., a private business that promotes tourism in the gambling center, has a Visa-branded reward card issued by MBNA Corp. Las Vegas hosts 36 million tourists annually, but local officials say business lately has been soft.
  "We see it as a way to drive more business to Las Vegas. A cardholder can purchase groceries in Detroit or Singapore and redeem points here," says Howard Lefkowitz, president and chief executive of
  Cardholders can use the card to book golf outings, casino shows, hotel rooms and tours of the Grand Canyon. Card applications are available on the Web site.
  Michael Auriemma, president of Auriemma Consulting Group Inc., says the card appeals to him on both a personal and professional level.
  "I would be very interested in the card because I love Las Vegas," Auriemma says. "I could see that it also would appeal to a small group of people; it won't be a card carried by millions."
  'Micro-Affinity' Program
  MBNA also issues the "I Love New York" card, a non-rewards card from the New York Department of Tourism. An MBNA spokesperson says the Wilmington, Del.-based issuer re-launched the card about a year ago.
  It isn't known how many city and state governments offer cards because of the fragmented nature of card issuance. But U.S. Bank, the card-issuing subsidiary of Minneapolis-based U.S. Bancorp, has decided to support the market.
  "It's our micro-affinity relationship program," says Diane Sommers, U.S. Bank's vice president of product development. In the first quarter, the bank began issuing a Visa card for Huntington Beach, Calif., Malibu's coastal neighbor.
  Finding an issuer and launching the Malibu card program as a fundraiser for the city's five public schools was no endless summer for Lippman.
  "I went to a Bank of America branch, and they tried to sell me a loan," he says, adding that another bank wasn't interested either.
  "U.S. Bank said, however, (that) it had just the product we were looking for," says Lippman, who is doing his best to promote the card. He has 'take-one' applications in City Hall, the town's senior center, and schools.
  "I have 5,000 in my office, you want one?" he quips.
  Lippman encourages PTA members to give card applications to parents, and he has asked the local chamber of commerce to urge the city's store owners to offer discounts to customers who shop with the Malibu card. Card applications also are available at U.S. Bank's Malibu branch.
  Consumer demand for municipal cards is yet to be proven. Like a retail card, a municipal card could prove popular because of its rewards. Or consumers could be drawn to the cachet of the city name on the card.
  Auriemma says Valley National Bank, then headquartered in South Orange, N.J., issued the first card for South Orange 10 years ago. The bank has since moved to Wayne, N.J.
  "It didn't really make a lot of sense to me because who would want to go to South Orange? I spent a week there once. I know," says Auriemma.

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