Kmart and Capital One Launch New CoBranded MasterCard

Customers benefit from 'private label plus' benefits

Kmart Corporation (NYSE: KM) and Capital One Financial Corporation (NYSE: COF) today announced the launch of the new Kmart MasterCard™ offering Kmart shoppers greater financial flexibility and buying power. The new Kmart MasterCard combines the exclusivity of private label card benefits along with MasterCard's global acceptance at more than 18 million locations.

The value of the Kmart MasterCard is in the "Private Label Plus" benefits. Kmart MasterCard cardholders will receive benefits such as special promotions that are traditionally tied to private label retail cards as well as the extended buying power MasterCard offers worldwide. Plus, all Kmart MasterCard purchases, within the first six months at any of Kmart's more than 2,000 stores nationwide, will carry no interest. And, marrying online and offline retailing, all purchases made with the Kmart MasterCard at can be returned or exchanged at any local Kmart store.

"Our new Kmart MasterCard will bring our customers more convenience, greater flexibility and special savings when they shop our stores or online at," said Tom Lemke, Kmart's Vice President Data Base Marketing.

"Capital One has built its success on our ability to mass customize financial services products to meet consumers' needs across the credit spectrum," said Jory Berson, Vice President, Marketing and Analysis. "It's this capability that makes the relationship between a leading retailer and great brand like Kmart and a leading financial services company like Capital One a win for Kmart shoppers."

  Consumers can apply for the Kmart MasterCard via:

  *  Any Kmart store (except Puerto Rico, Guam, and the US Virgin Islands)
  *  Phone at 1-800-GO-KMART
  *  Online at with instant decisioning (as of October
  *  Direct mail (check the mailbox!)

Headquartered in Falls Church, Virginia, Capital One Financial Corporation ( ) is a holding company whose principal subsidiaries, Capital One Bank and Capital One, F.S.B., offer consumer lending products. Capital One's subsidiaries collectively had 27.1 million accounts and $21.9 billion in managed loans outstanding as of June 30, 2000. Capital One is one of the major financial service providers on the Internet, with online account decisioning, real-time account numbering, online retail deposits and a growing number of customers serviced online. Capital One is a FORTUNE 500 company that trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 500 index. Capital One was named "Card Marketer of the Year" by Card Marketing magazine (March 2000) and also listed by Business Week as one of its WebSmart 50 (September 18, 2000).

Kmart Corporate serves America with 2,164 Kmart, Big Kmart and Super Kmart retail outlets. In addition to all 50 states, Kmart operations extend to Puerto Rico, Guam and the U.S. Virgin Islands. More information about Kmart is available on the World Wide Web at under the "About Kmart" section.

SOURCE: Kmart Corporation

Contact: Mary Lorencz of Kmart Corp., 248-463-1021; or Dana Cilluffo of
Capital One, 703-205-1069



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