UNITED STATES
                    SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D.C.  20549
                          _______________________
                                     
                                 FORM 10-Q
                                     
                                     
                                     
             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                  OF THE SECURITIES EXCHANGE ACT OF 1934



For The Quarter Ended                                001-12351
June 30, 1997                           Commission File Number

                        ___________________________


                           METRIS COMPANIES INC.
          (Exact name of registrant as specified in its charter)
                                     
                                     
        Delaware                                41-1849591
(State of Incorporation)            (I.R.S. Employer Identification No.)


    600 South Highway 169, Suite 1800, St. Louis Park, Minnesota  55426
                 (Address of principal executive offices)
                                     
                                     
                              (612) 525-5020
           (Registrant's telephone number, including area code)
                                     
                                     

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.

                Yes   X                 No _____

As of July 31, 1997, 19,225,000 shares of the Registrant's Common
Stock, par value $.01 per share, were outstanding.

                             METRIS COMPANIES INC.
                                       
                                   FORM 10-Q
                                       
                               TABLE OF CONTENTS




                                 June 30, 1997

                                                                  Page

PART I.   FINANCIAL INFORMATION


     Item 1.    Consolidated Financial Statements (unaudited):
                Consolidated Balance Sheets....................      3
                Consolidated Statements of Income..............      4
                Consolidated Statements of Cash Flows..........      5
                Notes to Consolidated Financial Statements.....      6

     Item 2.    Management's Discussion and Analysis of
                Financial Condition and Results of
                Operations.....................................     10


PART II.    OTHER INFORMATION

     Item 4.    Submission of Matters to a Vote of Security Holders 26

     Item 6.    Exhibits and Reports on Form 8-K................... 26

                Signatures......................................... 27
Item 1.

METRIS COMPANIES INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(dollars in thousands, except per share data) (unaudited)

                                                      June 30,     December 31,
                                                        1997           1996
Assets                                                             
Cash and due from banks                              $ 13,093         $  8,902
Federal funds sold                                     34,962           19,001
Short-term investments                                     86            4,179
  Cash and cash equivalents                            48,141           32,082
Credit card loans:                                                  
  Loans held for securitization                        49,663           14,164
  Retained interests in loans securitized             226,798          201,165
     Less: Allowance for loan losses                   18,191           12,829
  Net credit card loans                               258,270          202,500
Premises and equipment, net                             6,721            5,163
Accrued interest and fees receivable                    3,027            2,942
Prepaid expenses and deferred charges                   8,279            4,826
Deferred income taxes                                  49,852           31,528
Other assets                                           11,551            7,575
  Total assets                                       $385,841         $286,616
Liabilities                                                         
Interest-bearing deposit from affiliate              $                $  1,000
Short-term borrowings                                  49,000           54,163
Accounts payable                                       29,851           15,583
Other payables due to credit card                                   
securitizations, net                                   77,471           36,619
Current income taxes payable to FCI                    15,745            1,460
Deferred income                                        40,792           23,183
Accrued expenses and other liabilities                 16,999           15,890
  Total liabilities                                   229,858          147,898
Stockholders' Equity                                                
Preferred stock, par value $.01 per share;                          
10,000,000 shares
authorized, none issued or outstanding
Common stock, par value $.01; 100,000,000 shares                    
authorized, 19,225,000 shares issued and                  192             192
outstanding
Paid-in capital                                       107,220          107,220
Retained earnings                                      48,571           31,306
  Total stockholders' equity                          155,983          138,718
  Total liabilities and stockholders' equity         $385,841         $286,616

         See accompanying Notes to Consolidated Financial Statements.

METRIS COMPANIES INC. AND SUBSIDIARIES
Consolidated Statements of Income
(in thousands, except per share data) (unaudited)

                                     Three Months Ended   Six Months Ended
                                          June 30,            June 30,
                                       1997        1996   1997      1996
Interest Income                                                     
Credit card loans                    $ 14,221  $  6,763   $26,155    $ 12,119
Federal funds sold                        449       118       755         436
Other                                     168        35       358          64
 Total interest income                 14,838     6,916    27,268      12,619
Interest Expense                                                    
Deposit                                              12         7          24
Short-term borrowings                   2,073       749     3,525       1,834
 Total interest expense                 2,073       761     3,532       1,858
Net Interest Income                    12,765     6,155    23,736      10,761
Provision for loan losses               6,429       483    17,483       5,173
Net interest income after                                           
 provision for loan losses              6,336     5,672     6,253       5,588
Other Operating Income                                              
Net extended service plan revenues      1,332     4,439     1,621       8,615
Net securitization and credit card                                   
servicing income                       18,294     7,098    44,827      20,536
Credit card fees, interchange                                       
 and other credit card income          10,234     8,954    17,836      12,078
Fee-based product revenues             12,801     7,439    24,625      12,067
                                       42,661    27,930    88,909      53,296
Other Operating Expense                                             
Credit card account and other                                        
product solicitation and marketing      8,756     8,923    16,477      16,461
expenses
Employee compensation                   8,184     4,715    16,137       7,723
Data processing services and                                        
 communications                         4,254     2,904     9,265       5,196
Third-party servicing expenses          2,769     2,454     5,739       4,613
Warranty and debt waiver                                            
underwriting and claims                 1,172     2,273     2,388       4,061
servicing expenses
Credit card fraud losses                  680       730     1,579       1,066
Other                                   7,379     3,410    15,192       5,302
                                       33,194    25,409    66,777      44,422
Income Before Income Taxes             15,803     8,193    28,385      14,462
Income taxes                            6,084     3,154    10,928       5,568
Net Income                           $  9,719  $  5,039   $17,457    $  8,894
                                                                    
Earnings per share:                                                 
Primary                              $    .48  $    .31   $   .87    $    .54
Fully diluted                        $    .48  $    .31   $   .86    $    .54
                                                                    
Weighted average common and common                                  
equivalent shares - fully diluted      20,227    16,496    20,233      16,496
                                       
         See accompanying Notes to Consolidated Financial Statements.

METRIS COMPANIES INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(dollars in thousands) (unaudited)

                                                              Six Months Ended
                                                                  June 30,
                                                              1997        1996
Operating Activities:
Net income                                               $  17,457    $  8,894
Adjustments to reconcile net income to net cash
 provided by operating activities:
Provision for loan losses                                   17,483       5,173
Depreciation and amortization                                6,080       3,277
 Net amortization of gain on securitization
   of credit card loans                                     (1,927)      2,728
 Changes in operating assets and liabilities:
   Accrued interest and fees receivable                        (85)         108
   Prepaid expenses and deferred charges                    (7,052)      (2,148)
   Deferred income taxes                                   (18,324)     (11,949)
   Accounts payable and accrued expenses                    15,377       (2,827)
  Other payables due to credit card
      securitizations, net                                  42,459       22,953
   Current income taxes payable to FCI                      14,285        3,371
   Deferred income                                          17,609       11,082
   Other                                                    (5,521)      (1,867)
Net cash provided by operating activities                $  97,841     $ 38,795

Investing Activities:
Proceeds from sales of loans                               447,750      487,500
Net loans originated or collected                         (481,199)    (527,948)
Credit card portfolio acquisition                          (39,804)
Additions to premises and equipment                         (2,174)      (1,696)
Net cash used in investing activities                    $ (75,427)   $ (42,144)

Financing Activities:
Decrease in interest-bearing deposit                        (1,000)
Net decrease in short-term borrowings                       (5,163)      (9,164)
Cash dividends paid                                           (192)
Net cash used in financing activities                    $  (6,355)   $  (9,164)

Net increase(decrease) in cash and cash equivalents         16,059      (12,513)
Cash and cash equivalents at beginning of period            32,082        34,743
Cash and cash equivalents at end of period               $  48,141     $  22,230


         See accompanying Notes to Consolidated Financial Statements.

METRIS COMPANIES INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(unaudited)

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

     The consolidated financial statements include the accounts of Metris
Companies Inc. ("MCI") and its subsidiaries (collectively, "the Company").
The Company is an information-based direct marketer of consumer credit
products, fee-based products and services, and extended service plans to
moderate-income consumers.  The Company's business is conducted through Metris
Direct, Inc., Direct Merchants Credit Card Bank, National Association ("Direct
Merchants Bank") and Metris Receivables, Inc. ("MRI"), each a wholly-owned
subsidiary of MCI.

     Prior to September 1996, the Company operated as a division of Fingerhut
Companies, Inc. ("FCI").  During September 1996, FCI reorganized the business
through the formation of MCI. The stock of Metris Direct, Inc., Direct
Merchants Bank, and MRI, in addition to the assets, liabilities and equity of
certain portions of the retail extended service plan business, was contributed
to the Company from FCI and its subsidiaries.  In October 1996, the Company
completed an initial public offering of its common stock.

     The consolidated financial statements include an allocation of expenses
for data processing and information systems, audit, accounting, treasury,
legal, human resources, customer service and other administrative support
historically provided by FCI and its subsidiaries to the Company.  Such
expenses were based on the actual use of such services or were based on other
allocation methods that, in the opinion of management, are reasonable.  During
1996, FCI and the Company entered into an administrative services agreement
which covers such expense allocations and the provision of future services
using similar rates and allocation methods for various terms, the latest of
which expires at the end of 1998.  The consolidated financial statements also
reflect the retroactive effects of intercompany agreements entered into during
1996, including co-brand credit card, database access, data sharing and
extended service plan agreements with Fingerhut Corporation ("Fingerhut"), a
wholly owned subsidiary of FCI, and a tax sharing agreement with FCI.  These
agreements have terms ranging up to seven years.  In addition, the
consolidated financial statements include an allocation of interest expense
for the Company's net borrowings from FCI during 1996.

     All significant intercompany balances and transactions have been
eliminated in consolidation.

Interim Financial Statements

     The unaudited interim consolidated financial statements and related
unaudited financial information in the footnotes have been prepared in
accordance with generally accepted accounting principles and the rules and
regulations of the Securities and Exchange Commission for interim financial
statements.  Such interim financial statements reflect all adjustments,
consisting of normal recurring accruals, which in the opinion of management,
are necessary to present fairly the consolidated financial position of the
Company, and the results of its operations and its cash flows for the interim
periods.  These consolidated financial statements should be read in
conjunction with the financial statements and the notes thereto contained in
the Company's 1996 annual report to shareholders and incorporated by reference
in the Company's annual report on Form 10-K.  The nature of the Company's
business is such that the results of any interim period may not be indicative
of the results to be expected for the entire year.

Pervasiveness of Estimates

    The consolidated financial statements have been prepared in accordance
with generally accepted accounting principles, which require management to
make estimates and assumptions that affect the reported amount of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the consolidated financial statements as well as the reported amount of
revenues and expenses during the reporting periods.  Actual results could
differ from these estimates.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Consolidated Statements of Cash Flow

     Cash paid for interest during the six months ended June 30, 1997 and
1996, was $3.2 million and $1.9 million, respectively.  Cash paid for income
taxes for the same periods was $15.0 million and $14.3 million, respectively.

Earnings Per Share

     Earnings per share is computed using net income applicable to common
stock and the weighted average number of common and common equivalent shares
outstanding, after giving retroactive effect to the shares outstanding as if
the Company's reorganization (See Note 1) had occurred at the beginning of the
first period shown.  The common equivalent shares outstanding were calculated
using the treasury stock method, using the initial public offering price for
the period prior to the initial public offering.  In addition, common
equivalent shares outstanding were calculated assuming that certain options
were converted into shares of the Company's common stock at the beginning of
the first period shown.

     In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128 ("FAS 128"), "Earnings Per
Share."  This Statement is effective for financial statements issued for
periods ending after December 15, 1997 and supersedes APB Opinion No. 15,
"Earnings Per Share."  The Statement replaces the presentation of primary EPS
with a presentation of basic EPS.  It also requires dual presentation of basic
and diluted EPS on the face of the income statement.

     The Company has reviewed this Statement and notes that it will affect the
computation and presentation of EPS.  However, the Company has not completed
all of the detailed computations and analysis necessary to determine the
definitive impact on prior-period EPS as well as the calculation of EPS going
forward.  The Company intends to adopt this statement prospectively, in the
fourth quarter of 1997, as early application is not permitted.

Extended Service Plans

     The Company coordinates the marketing activities for Fingerhut's sales of
extended service plans and reimburses Fingerhut for the cost of its marketing
media and other services utilized in the sales of extended service plans,
based on contracts sold and on media utilization costs as agreed to by the
Company and Fingerhut.

     The Company began performing administrative services on January 1, 1997,
and retained the claims risk for all extended service plans sold on or after
January 1, 1997.  As a result, extended service plan revenues and the related
expenses have been deferred and will be recognized over the life of the
related extended service plan contracts.  Prior to January 1, 1997 the Company
contracted with a third-party underwriter and claims administrator to service
and absorb the risk of loss for most claims. These claims servicing contract
costs were expensed as the service contracts were sold, net of the related
cost of anticipated service contract returns.  In addition, the revenues
related to these contract sales were recognized immediately

Interest Rate Risk Management Contracts

     The Company enters into interest rate cap and swap agreements to hedge
its economic exposure to fluctuating interest rates associated with both the
floating rate and fixed rate certificates issued by the Metris Master Trust.
If a derivative financial instrument or the instrument it is hedging is sold
or terminated, the Company will recognize a gain or loss resulting from the
transaction in the period the derivative is sold or terminated.  The Company
has not sold or terminated any derivative financial instruments.

NOTE 3 - CREDIT CARD SECURITIZATIONS

     The Company securitizes and sells a portion of its credit card loans to
both public and private investors through the Metris Master Trust (the
"Trust").  Credit card loans are transferred to the Trust, which issues
certificates representing undivided ownership interests in the Trust.  The
Company also retains participation interests in the Trust (under "Retained
interests in loans securitized" on the consolidated balance sheets), in an
amount equal to the amount of the retained subordinated certificates of each
series held by MRI plus the amount equal to the loans in excess of the
principal balance of the certificates.  Although the Company continues to
service the underlying credit card accounts and maintains the customer
relationships, these transactions are treated as sales for financial reporting
purposes and the associated loans are not reflected on the consolidated
balance sheets.  The Company has receivables from and payables to the Trust as
a result of securitizations, including amounts deposited in an investor
reserve account held by the trustee for the benefit of the Trust's
certificateholders, the excess servicing asset, which represents the net gain
recorded at any point in time for loans sold under the asset securitizations,
net of recourse reserves for securitized loans and normal and excess servicing
fee receivables.

     In May 1997, the Metris Master Trust issued Series 1997-1 certificates to
third parties with a principal amount of $794.8 million, generating proceeds
of $792.2 million of which $667.7 million was used to reduce the Class A
Variable Funding Certificates issued under Series 1995-1.  The Series 1997-1
certificates are scheduled to begin accumulating principal collections in
March 2001, however the accumulation period could potentially begin at a later
date.  The expected final payment date of these certificates is in April 2002.

NOTE 4 - ALLOWANCE FOR LOAN LOSSES

     The activity in the allowance for loan losses is as follows:

                                 Three Months Ended       Six Months Ended
                                      June 30,                June 30,
                                  1997        1996        1997        1996
(in thousands)                                                     
Balance at beginning of        $ 19,357    $  6,745    $12,829     $  3,679
period
Allowance related to assets                                        
  acquired, net                                            806
Provision for loan losses         6,429         483     17,483        5,173
Loans charged-off                 7,755       1,969     13,205        3,629
Recoveries                          160          44        278           80
Net loans charged-off             7,595       1,925     12,927        3,549
Balance at end of period       $ 18,191    $  5,303    $18,191     $  5,303


NOTE 5 - SHORT TERM BORROWINGS

     The Company borrows under a $300 million, five-year revolving credit
facility for the Company (the "Revolving Credit Facility"), guaranteed by FCI
to fund on-balance sheet loans and for other general business purposes.  At
June 30, 1997 and December 31, 1996, the Company had outstanding borrowings of
$49 million and $50 million, respectively, under the Revolving Credit
Facility.  The interest rates on the Revolving Credit Facility borrowings at
June 30, 1997 and December 31, 1996 were 6.5% and 5.9%, respectively. The
Company had outstanding borrowings from FCI of $4.2 million at a weighted
average interest rate of 7.1% at December 31, 1996.




ITEM 2.
                                       
                    METRIS COMPANIES INC. AND SUBSIDIARIES
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS



    The following discussion and analysis provides information that management
believes to be relevant to understanding the financial condition and results
of operations of Metris Companies Inc. and subsidiaries (the "Company").  This
discussion should be read in conjunction with the consolidated financial
statements and the related notes thereto.

General

     The Company is an information-based direct marketer and provider of
consumer credit products, fee-based products and services and extended service
plans to moderate-income consumers.

    Consumer Credit Products

     The Company's consumer credit products currently are unsecured and
secured credit cards, including the Fingerhut co-branded MasterCard(R)and the
Direct Merchants Bank MasterCard and Visa(R). The primary factors affecting
the profitability of consumer credit products are credit card account and loan
growth, interest spreads on loans, credit card usage, credit quality
(delinquencies and charge-offs), the level of solicitation and marketing
expenses, fraud losses, servicing and other administrative costs. The Company
generates interest and other income through finance charges assessed on
outstanding credit card loans, credit card fees (including annual membership,
cash advance, overlimit, past-due, and other credit card fee income) and
interchange income. The Company's primary related expenses are the costs of
funding its loans, provisions for loan losses and operating expenses including
employee compensation, account solicitation and marketing expenses, and data
processing and servicing expenses.

    Fee-Based Products and Services

     The Company markets its fee-based products and services, including debt
waiver programs, card registration, third party insurance, and membership
clubs, to its credit card customers, Fingerhut Corporation ("Fingerhut")
customers and other third party partners. Profitability for fee-based products
and services is affected by the response rates to product solicitation
efforts, the targeted solicitation plans, the commission rates received from
or paid to the Company's product partners, claims rates and claims servicing
costs for certain programs, and other operating expenses.

    Extended Service Plans

     The Company provides extended service plans that extend warranty service
coverage beyond the manufacturer's warranty on selected products sold by
Fingerhut. Extended service plan profitability is directly affected by the
response rates to product solicitation efforts, returns or cancel rates for
the underlying product, the retail sales price of the product on which an
extended service plan is sold, the cost of underwriting and claims servicing,
and other operating costs.

Results of Operations

     Net income for the three months ended June 30, 1997, was $9.7 million, or
$.48 per share, up 93% from $5.0 million, or $.31 per share for the second
quarter of 1996.  The increase in net income is the result of an increase in
net interest income and other operating income partially offset by increases
in the provision for loan losses and other operating expenses.  These
increases are largely attributable to the growth in average managed loans to
$1.9 billion for the second quarter 1997 from $873 million for the second
quarter 1996, an increase of 123%.

     Net income for the six months ended June 30, 1997, was $17.5 million, or
$.86 per share, up 96% from $8.9 million, or $.54 per share for the second
quarter of 1996.  The increase in net income is the result of an increase in
net interest income and other operating income partially offset by increases
in the provision for loan losses and other operating expenses.  These
increases are largely attributable to the growth in average managed loans to
$1.8 billion for the six months ended June 30, 1997 from $741 million for the
same period in 1996, an increase of 147%.  In addition, credit card charge
volume was $1.1 billion for the first half of 1997, a 37% increase over the
same period in 1996.


Managed Loan Portfolio and the Impact of Credit Card Securitizations

    Securitization

     Securitizations of credit card loans have been and are expected to be a
major source of funding for the Company. The effect of securitization on the
Company's consolidated financial statements is to remove credit card loans
sold with limited recourse from the consolidated balance sheet and record a
gain on sale for the difference between the carrying value of the loans and
the adjusted sales proceeds.

     The securitization and sale of credit card loans changes the Company's
interest in such loans from lender to servicer, with a corresponding change in
how revenues and expenses are reported in the income statement. For
securitized and sold credit card loans, amounts that otherwise would have been
recorded as net interest income, fee income and provision for loan losses are
instead reported in other operating income as net securitization and credit
card servicing income.

     During the first quarter of 1997, the Company implemented Statement of
Financial Accounting Standards No. 125 ("FAS 125") "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities".  FAS
125 did not have a material effect on the Company's consolidated financial
statements.
    Managed Loan Portfolio

     The Company analyzes its financial performance on a managed loan
portfolio basis. To do so, the income statement and balance sheet are adjusted
to reverse the effects of securitization. The Company's discussion of
revenues, where applicable, and provision for loan losses includes comparisons
to amounts reported in the Company's consolidated statements of income ("owned
basis" or "on-balance sheet") as well as on a managed basis.

     The Company's managed loan portfolio is comprised of credit card loans
held for securitization, retained interests in loans securitized and the
investors' interests in securitized credit card loans. The investors'
interests in securitized credit card loans is not an asset of the Company,
and, therefore, is not shown on the Company's consolidated balance sheets. The
following tables summarize the Company's managed loan portfolio:

                                                       June 30,
                                                  1997         1996
Dollars in thousands                                        
Period-end balances                                         
Credit card loans:                                          
 Loans held for securitization                 $            $
                                                   49,663       19,714
 Retained interests in loans securitized          226,798      112,249
 Investors' interests in securitized loans                            
                                                1,848,360      936,055
Total managed loan portfolio                   $            $
                                                2,124,821    1,068,018


                                       Three Months Ended     Six Months Ended
                                            June 30,              June 30,
Dollars in thousands                     1997       1996      1997        1996
Average balances                                                            
Credit card loans:                                                     
 Loans held for securitization        $ 105,373   $44,633   $  71,205  $33,457
 Retained interests in loans            217,331    93,266     217,393   91,721
securitized
 Investors' interests in securitized                                   
loans                                 1,624,967   734,695   1,541,436  615,999
Total managed loan portfolio         $1,947,671 $ 872,594  $1,830,034 $741,177
                                                  



    Impact of Credit Card Securitizations. The following table provides a
summary of the effects of credit card securitizations on selected line items
of the Company's income statements for each of the periods presented, as well
as selected financial information on both an owned and a managed loan
portfolio basis:

                                    Three Months Ended      Six Months Ended
                                         June 30,               June 30,
                                     1997         1996       1997       1996
Dollars in thousands                                                  
Statements of Income (owned                                           
basis)
 Net interest income             $   12,765     $  6,155  $  23,736 $  10,761
 Provision for loan losses            6,429          483     17,483     5,173
 Other operating income              42,661       27,930     88,909    53,296
 Other operating expense             33,194       25,409     66,777    44,422
 Income before income taxes      $   15,803     $  8,193  $  28,385 $  14,462
Adjustments for Securitizations                                       
 Net interest income             $   54,844     $ 24,550  $ 102,296 $  41,590
 Provision for loan losses           60,271       27,023    105,439    37,301
 Other operating income               5,427        2,473      3,143    (4,289)
 Other operating expense                                              
 Income before income taxes      $              $         $         $
Statements of Income (managed                                         
basis)
 Net interest income             $   67,609     $ 30,705  $ 126,032 $  52,351
                                                                      
 Provision for loan losses           66,700       27,506    122,922    42,474
                                                                      
 Other operating income              48,088       30,403     92,052    49,007
                                                                      
 Other operating expense             33,194       25,409     66,777    44,422
                                                                      
 Income before income taxes      $   15,803     $  8,193  $  28,385 $   4,462
                                                                      
                                                                      
Other Data:                                                           
Owned Basis                                                           
 Average interest-earning assets $  369,301     $149,788  $ 330,430 $ 144,109
 Return on average assets               9.0%        11.0%       9.1%      9.6%
 Return on average equity               25.5%       26.4%      23.8%     23.8%
 Net interest margin (1)                13.9%       16.5%      14.5%     15.0%
                                
Managed Basis                                                         
 Average interest-earning assets $1,994,268     $884,483  $1,871,866$ 760,107
 Return on average assets               1.9%         2.2%        1.9%     2.2%
 Return on average equity               25.5%       26.4%       23.8%    23.8%
 Net interest margin (1)                13.6%       14.0%       13.6%    13.9%
                                 

(1)  Net interest margin is equal to annualized net interest income divided by
average interest-earning assets.

    Net Interest Income

    Net interest income consists primarily of interest earned on the Company's
credit card loans less interest expense on borrowings to fund the loans.
Managed net interest income for the three months ended June 30, 1997, was
$67.6 million compared to $30.7 million for the same period in 1996.  This
increase was primarily due to a $1.1 billion increase in average loans over
the comparable period in 1996.

     Managed net interest income was $126.0 million for the six months ended
June 30, 1997, compared to $52.4 million for the same period in 1996. This
increase was primarily due to a $1.1 billion increase in average loans over
the comparable period in 1996.

     The following tables provide an analysis of interest income and expense,
net interest spread, net interest margin and average balance sheet data for
the three and six month periods ended June 30, 1997 and 1996:

Analysis of Average Balances, Interest and Average Yields and Rates

                                                 Three Months Ended June 30,
<TABLE>
                                         1997                                1996
                            Average                  Yield/        Average             Yield/
                            Balance      Interest     Rate         Balance   Interest   Rate
Dollars in thousands

Owned Basis
Assets:
Interest-earning assets:
<S>                        <C>          <C>  <C>      <C>       <C> <C>    <C>        <C>
Federal funds sold         $  33,076    $    449      5.4%      $   8,984  $ 118      5.3%
Short-term investments        13,521         168      5.0%          2,904     35      4.8%
Credit card loans            322,704      14,221     17.7%        137,900   6,763    19.7%
Total interest-earning
  assets                   $ 369,301     $14,838     16.1%     $  149,788  $6,916    18.6%

Cash and due from banks       11,210                                3,443
Accrued interest and fees      4,360                                3,124
Other amounts due from
  securitizations                                                   5,763
Other assets                  70,205                               27,812
Allowance for loan losses    (21,535)                              (4,994)
  Total assets             $ 433,541                           $  184,936
Liabilities and Equity:
Interest-bearing
  liabilities:
Interest-bearing deposit   $         $                         $    1,000 $    12     4.8%
Short-term borrowings        122,176       2,073      6.8%         53,549     749     5.6%
  Total                      122,176       2,073      6.8%         54,549     761     5.6%
Other liabilities            158,730                               53,637   
Total liabilities            280,906                              108,186
Stockholders' equity         152,635                               76,750
Total liabilities and
  equity                   $ 433,541                           $  184,936
Net interest income and
  interest margin (1)                    $12,765     13.9%                $ 6,155    16.5%
Net interest rate
  spread (2)                                          9.3%                           13.0%

Managed Basis
Credit card loans          $1,947,671    $93,748     19.3%     $  872,594 $42,215    19.5%
Total interest-earning
  assets                   1,994,268      94,365     19.0%        884,483  42,368    19.3%
Total interest-bearing
  liabilities              1,747,143      26,756      6.1%        789,243  11,663     5.9%
Net interest income and
  interest margin (1)                     67,609     13.6%                 30,705    14.0%
Net interest rate
  spread (2)                                         12.9%                           13.4%
</TABLE>
(1)  Net interest margin is computed by dividing annualized net interest
income by average total interest-earning assets.
(2)  The net interest rate spread is the annualized yield on average interest-
earning assets minus the funding rate on average interest-bearing liabilities.

                                            Six Months Ended June 30,
                                         1997                             1996
<TABLE>
                             Average                 Yield/      Average                 Yield/
                             Balance     Interest     Rate       Balance     Interest    Rate
Dollars in thousands

Owned Basis
Assets:
Interest-earning assets:
<S>                        <C>           <C> <C>      <C>      <C> <C>      <C> <C>      <C>
Federal funds sold         $  28,286     $   755      5.4%     $   16,410   $   436      5.3%
Short-term investments        13,546         358      5.3%          2,521        64      5.1%
Credit card loans            288,598      26,155     18.3%        125,178    12,119     19.5%
Total interest-earning
  assets                   $ 330,430     $27,268     16.6%     $  144,109   $12,619     17.6%

Cash and due from banks       10,997                                3,197   
Accrued interest and fees      3,517                                2,475
Other amounts due from
  securitizations                                                  16,490
Other assets                  63,006                               25,011
Allowance for loan losses    (19,126)                              (5,078)
  Total assets             $ 388,824                           $  186,204
Liabilities and Equity:
Interest-bearing
  liabilities:
Interest-bearing deposit  $      333    $      7      4.5%    $    1,000     $   24      4.8%
Short-term borrowings        102,735       3,525      6.9%         63,351     1,834      5.8%
  Total                      103,068       3,532      6.9%         64,351     1,858      5.8%
Other liabilities            137,776                               46,598
Total liabilities            240,844                              110,949
Stockholders' equity         147,980                               72,255
Total liabilities and
  equity                  $  388,824                          $   186,204
Net interest income and
  interest margin (1)                   $ 23,736     14.5%                  $10,761     15.0%
Net interest rate
  spread (2)                                          9.7%                              11.8%

Managed Basis
Credit card loans         $1,830,034    $174,098     19.2%      $ 741,177   $71,592     19.4%
Total interest-earning
  assets                   1,871,866     175,211     18.9%        760,107    72,092     19.1%
Total interest-bearing
  liabilities              1,644,504      49,179      6.0%        680,350    19,741      5.8%
Net interest income and
  interest margin (1)                    126,032     13.6%                   52,351     13.9%
Net interest rate
  spread (2)                                         12.9%                              13.3%
</TABLE>
(1)  Net interest margin is computed by dividing annualized net interest
income by average total interest-earning assets.
(2)  The net interest rate spread is the annualized yield on average interest-
earning assets minus the funding rate on average interest-bearing liabilities.


Other Operating Income
<TABLE>
                                          Three Months Ended      Six Months Ended
                                               June 30,                June 30,
                                           1997       1996        1997        1996

Dollars in thousands

Other Operating Income:
<S>                                     <C>         <C>        <C>         <C>
Net extended service plan revenues      $  1,332    $  4,439   $  1,621    $  8,615
Net securitization and credit card
  servicing income                        18,294       7,098     44,827      20,536 
Credit card fees, interchange and                                          
other credit card income                  10,234       8,954     17,836      12,078
Fee-based product revenues                12,801       7,439     24,625      12,067
  Total                                 $ 42,661    $ 27,930   $ 88,909    $ 53,296
</TABLE>
     Other operating income contributes substantially to the Company's results
of operations, representing 74% and 77% of owned revenues for the three and
six months ended June 30, 1997, respectively.  Fee-based product revenues,
particularly from debt waiver products, continue to provide an increasing
percentage of other operating income.  Debt waiver products and other fee-
based product revenues are expected to increase with growth in credit card
accounts and as the Company continues to offer other fee-based products to its
customer base and to customers of certain third-party credit card issuers.

     The following definitions may be helpful when reading the discussion and
analysis of other operating income:

     Net extended service plan revenues - Net extended service plan revenues
include revenues received from sales of extended service plans, net of a
provision for service plan returns.  The Company began performing
administrative services on January 1, 1997, and retained the claims risk for
all extended service plans sold on or after January 1, 1997.  As a result,
extended service plan revenues are deferred and recognized over the life of
the related extended service plan contracts.  Prior to January 1, 1997 the
Company contracted with a third-party underwriter and claims administrator to
service and absorb the risk of loss for most claims and the revenues related
to these contract sales were recognized immediately.

     Net securitization and credit card servicing income - Due to the
securitization of credit card loans, activity from securitized account
balances normally reported as net interest income, fee income, and provision
for loan losses is reported in net securitization and credit card servicing
income. Net securitization income is the excess of interest and fee income
earned over the related securitization trust expenses, including interest
payments to certificateholders in the trust, provision for loan losses,
servicing costs and transaction expenses related to securitized loans. Credit
card servicing income is also included in this amount and represents fees paid
to the Company from the trust for servicing the securitized loans. Such fees
generally approximate 2% of average securitized loans on an annualized basis.


     Credit card fees, interchange and other credit card income - Credit card
fees include annual membership, cash advance, overlimit, past-due, and other
credit card fee income derived from on-balance sheet loans. Also included in
this amount is interchange income generated from total accounts, which
represents fees payable by merchants to the credit card issuer for sales
transactions. This amount presently represents approximately 1.4% of all net
credit card purchases.

     Fee-based product revenues - Fee-based product revenues presently include
revenues from sales of debt waiver protection for unemployment, disability,
and death, card registration, third party insurance, and revenues from
targeted list programs.

     Other operating income increased $14.7 million and $35.6 million for the
three and six months ended June 30, 1997, respectively, over the comparable
periods in 1996, primarily due to income generated from the growth in average
securitized credit card loans. Additionally, fee-based product revenues
increased by $5.4 million and $12.6 million, respectively, because of the
Company's marketing efforts to cross-sell other products and services to its
customers.  Specifically, debt waiver product revenue increased by $5.4
million and $11.7 million, respectively, due to increased receivables on
accounts with debt waiver protection and the addition of new credit card
customers with debt waiver protection.

     Net extended service plan revenues decreased by $3.1 million and $7.0
million, respectively, for the three and six months ended June 30, 1997
compared to the same periods of 1996.  These decreases reflect that on January
1, 1997, the Company assumed responsibility for claims processing and
underwriting on contracts sold on or after that date.  As a result, all
extended service plan revenues and the related expenses have been deferred and
will be recognized over the life of the related extended service plan
contracts.  The extended service plan revenues before accounting deferrals for
the second quarter 1997 were up 22% over the second quarter of 1996 due to a
19% increase in contracts sold.

Other Operating Expense
<TABLE>
                                       Three Months Ended       Six Months Ended
                                               June 30,                 June 30,
Dollars in thousands                       1997        1996          1997       1996
Other Operating Expense:
  <S>                                   <C>         <C>          <C>        <C>
Credit card account and other product   
  solicitation and marketing expenses   $  8,756    $  8,923     $  16,477  $ 16,461
Employee compensation                      8,184       4,715        16,137     7,723
Data processing services and
  communications                           4,254       2,904         9,265     5,196
Third party servicing expenses             2,769       2,454         5,739     4,613
Warranty and debt waiver underwriting
  and claims servicing expenses            1,172       2,273         2,388     4,061
Credit card fraud losses                     680         730         1,579     1,066
Other                                      7,379       3,410        15,192     5,302
  Total                                 $ 33,194    $ 25,409     $  66,777  $ 44,422
</TABLE>

     Total other operating expenses for the three and six months ended June
30, 1997, increased $7.8 million and $22.4 million, respectively, over the
comparable periods in 1996, primarily due to increases in employee
compensation, data processing services and communications, and other expenses.
Employee compensation increased due to staffing needs to support the increase
in credit card accounts, fee based products sold and internalization of
warranty operations.  The increase in data processing services and
communications expense was largely due to the increased number of credit card
accounts, transaction volumes and loan balances.  The increase in other
expenses is primarily due to general growth in all three business lines and
the costs associated with building an infrastructure to support the growth.

     Total other operating expenses include direct and allocated expenses from
Fingerhut Companies, Inc. ("FCI") for administrative services provided to the
Company under the Administrative Services Agreement.  Additionally, total
other operating expenses reflect the retroactive effects of additional
intercompany agreements and contracts between the Company and FCI or its
subsidiaries (See Note 1 to the Consolidated Financial Statements).


Income Taxes

     The Company's provision for income taxes includes both federal and state
income taxes. The Company's effective tax rate was 38.5% for the three and six
months ended June 30, 1997 and 1996, respectively.

Asset Quality

     The Company's delinquency and net loan charge-off rates at any point in
time reflect, among other factors, the credit risk of loans, the average age
of the Company's various credit card account portfolios, the effects of the
Company's collection and recovery efforts, and general economic conditions.
The average age of the Company's credit card portfolio affects the stability
of delinquency and loss rates of the portfolio. The Company continues to focus
its resources on refining its credit underwriting standards for new accounts,
and on collections and post charge-off recovery efforts to minimize net
losses.  At June 30, 1997, 44% of managed accounts and 31% of managed loans
were less than 12 months old.  Accordingly, the Company believes that its loan
portfolio will experience increased levels of delinquency and loan losses as
the average age of the Company's accounts increases.

     This trend is reflected in the increase in the Company's net charge-off
ratio.  For the quarter ended June 30, 1997, the Company's net charge-off
ratio stood at an annualized rate of 9.0%, compared to 8.5% for the quarter
ended March 31, 1997 and 5.4% for the quarter ended June 30, 1996. For the six
months ended June 30, 1997, the Company's net charge-off ratio stood at an
annualized rate of 8.8% compared to 5.5% for the six months ended June 30,
1996.  The Company believes, consistent with its statistical models and other
credit analyses, that this rate will continue to fluctuate but generally rise
over the next year.

     The Company's strategy for managing loan losses to maximize profitability
consists of credit line management and risk-based pricing so that an
acceptable profit margin is maintained based on the perceived risk of each
credit card account. Under this strategy, interest rates are established for
each credit card account based on its perceived risk profile. Loan losses are
further managed through the offering of credit lines which are generally lower
than is currently standard in the industry. Individual accounts and their
related credit lines are also continually managed using various marketing,
credit and other management processes in order to continue to maximize the
profitability of accounts.

     Delinquencies

     Delinquencies not only have the potential to impact earnings in the form
of net loan losses, but are also costly in terms of the personnel and
resources dedicated to resolving them. Delinquency levels are monitored on a
managed basis, since delinquency on either an owned or managed basis subjects
the Company to credit loss exposure. A credit card account is contractually
delinquent if the minimum payment is not received by the specified date on the
cardholder's statement. It is the Company's policy to continue to accrue
interest and fee income on all credit card accounts, except in limited
circumstances, until the account and all related loans, interest and other
fees are charged-off. The following table presents the delinquency trends of
the Company's credit card loan portfolio on a managed portfolio basis:

                                 Managed Loan Delinquency
                                             
                        June 30,     % of          June 30,      % of
                           1997     Total           1996        Total
                           Dollars in thousands
Managed loan portfolio  $ 224,821    100%      $1,068,018      100%
Loans delinquent:                     
   30 to 59 days           41,650   1.96%          14,882     1.39%
   60 to 89 days           27,400   1.29%           7,332     0.69%
   90 or more days         55,794   2.63%          13,750     1.29%
   Total                $ 124,844    5.88%     $   35,964     3.37%

     The above numbers reflect continued seasoning of the Company's managed
loan portfolio. The Company continues to focus its resources on its collection
efforts to minimize the negative impact to net loan losses that results from
increased delinquency levels.

    Net charge-offs

     Net charge-offs include the principal amount of losses from cardholders
unwilling or unable to pay their loan balance, as well as bankrupt and
deceased cardholders, less current period recoveries. Net charge-offs exclude
accrued finance charges and fees, which are charged against the related income
at the time of charge-off. The following table presents the Company's net
charge-offs for the periods indicated as reported in the consolidated
financial statements and on a managed portfolio basis:

                                 Three Months Ended      Six Months Ended
                                      June 30,               June 30,
                                  1997          1996     1997        1996
Dollars in thousands                                              
On-balance sheet portfolio:                                       
 Average loans outstanding      $ 322,704   $ 137,900  $ 288,598   $ 125,178
 Net charge-offs                    7,595       1,925     12,927       3,549
 Net charge-offs as a                                              
percentage      of loans              9.4%        5.6%       9.0%        5.7%
outstanding (1)                            
                                                                  
Managed loan portfolio:                                           
 Average loans outstanding      $1,947,671  $ 872,594  $1,830,034  $ 741,177
                               
 Net charge-offs                    43,684     11,627      79,572     20,388
 Net charge-offs as a                                              
percentage of loans                    9.0%       5.4%        8.8%       5.5%
outstanding (1)                            
                                                                  
(1) Annualized                                                    


     Provision and allowance for loan losses

     The allowance for loan losses is maintained for on-balance sheet loans.
For securitized loans, anticipated losses and related recourse reserves are
reflected in the calculations of net securitization and credit card servicing
income. Provisions for loan losses are made in amounts necessary to maintain
the allowance at a level estimated to be sufficient to absorb probable future
losses of principal and earned interest, net of recoveries, inherent in the
existing on-balance sheet loan portfolio.

     The provision for loan losses on an owned basis for the three and six
months ended June 30, 1997, totaled $6.4 million and $17.5 million,
respectively. This compares to provisions of $0.5 million and $5.2 million for
the three and six months ended June 30, 1996, respectively.  The amount and
level of the provision for loan losses on an owned basis may vary from period
to period, depending on the amount of credit card loans sold and securitized
in a particular period. However, the increases for the three and six month
periods ended June 30, 1997, as compared to the three and six month periods
ended June 30, 1996, are primarily reflective of the overall maturation of the
portfolio, the increase in on-balance sheet loans outstanding and the timing
of credit card securitizations.  The following table presents the change in
the Company's allowance for loan losses and other ratios on both an owned and
a managed portfolio basis for the periods presented:
                                       
                     Analysis of Allowance for Loan Losses
                                       
                                 Three Months Ended       Six Months Ended
                                      June 30,                June 30,
Dollars in thousands              1997          1996      1997          1996
(Owned basis)                                                      
Balance at beginning of        $ 19,357     $   6,745  $  12,829     $  3,679
period
Allowance related to assets                                         
acquired, net                                                806
Provision for loan losses         6,429           483     17,483        5,173
Loans charged-off                 7,755         1,969     13,205        3,629
Recoveries                          160            44        278           80
Net loans charged-off             7,595         1,925     12,927        3,549
Balance at end of period       $ 18,191     $   5,303  $  18,191     $  5,303
                                                                   
Ending allowance as a percent                                      
of loans                           6.58%         4.02%      6.58%        4.02%
                               
                                       
                                       
                                 Three Months Ended       Six Months Ended 
                                      June 30,                June 30,     
<TABLE>
<S>                            <C>           <C>        <C>        <C> <C>
Dollars in thousands              1997          1996      1997        1996
(Managed basis)                                                    
Balance at beginning of        $116,809      $  28,426  $ 95,669   $   22,219
period
Allowance related to assets                                        
 acquired, net                                               806
Provision for loan losses        66,700         27,506   122,922       42,474
Loans charged-off                44,598         11,870    81,280       20,814
Recoveries                          914            243     1,708          426
Net loans charged-off            43,684         11,627    79,572       20,388
Balance at end of period       $139,825      $  44,305  $139,825   $   44,305
                                                                   
Ending allowance as a percent      6.58%          4.15%     6.58%        4.15%           
of loans                                       
</TABLE>
                                                 
                                       
                                       
                            Derivatives Activities
                                       
        The Company uses derivative financial instruments for the purpose of
managing its exposure to interest rate risks and has mechanisms in place to
monitor and control both market and credit risk from these derivatives
activities. All derivatives strategies and transactions are managed under a
hedging policy approved by the Board of Directors of FCI that details the use
of such derivatives and the individuals authorized to execute such
transactions. In addition, all derivatives strategies must currently be
approved by the Company's senior management.
                                       
      Under these policies, the Company has entered into interest rate cap and
swap agreements to hedge its economic exposure to fluctuating interest rates
associated with the floating and fixed rate certificates issued by the Metris
Master Trust. In connection with the issuance of the $512.6 million Metris
Master Trust Series 1995-1 variable funding certificates in May 1995, the
Company entered into an eight-year agreement capping the certificates'
interest rate at 11.2%.  Also, in connection with the issuance of additional
Series 1995-1 certificates related to the September 1996 amendment of Series
1995-1, the Company entered into additional six and two-thirds year agreements
capping the certificates' interest rate at 11.2% with a maximum notional
amount of $512.6 million.  Additionally, FCI, on behalf of the Company,
entered into two interest rate swap agreements in April 1996 to synthetically
alter the fixed rate of the Metris Master Trust Series 1996-1 certificates to
a floating rate. Total notional amounts of these swap transactions amounted to
$605.5 million. In connection with the issuance of the Metris Master Trust
Series 1997-1 certificates the Company entered into a five year agreement to
synthetically alter the fixed rate of the certificates to a floating rate.
The total notional amount of this swap transaction amounted to $722.5 million.
The Company receives the benefits and bears the obligations of these swap
transactions, with FCI guaranteeing the Company's performance under the swap
agreements.  The obligations of the Company and the counterparties under these
swap agreements are settled on a monthly basis.
                                       
                                       
                                       
                   Liquidity, Funding and Capital Resources
                                       
       The Company's goal is to maintain an adequate level of liquidity, both
short-term and long-term, through active management of assets and liabilities.
Because the characteristics of the Company's assets and liabilities change,
liquidity management is a dynamic process affected by the pricing and maturity
of the Company's assets and liabilities. This process is also affected by
changes in the relationship between short-term and long-term interest rates.
Therefore, to facilitate liquidity management, the Company uses a variety of
funding sources to establish a maturity pattern with a mix of short-term and
long-term funds. These funding sources are available, or are committed to the
Company through programs established either by the Company or by FCI.
                                       
            A significant source of funding for the Company has been the
securitization of credit card loans. At June 30, 1997, the Company had
received cumulative net proceeds of approximately $1.8 billion from sales of
credit card loans, of which $9.2  million was deposited in an investor reserve
account held by the trustee of Metris Master Trust for the benefit of the
Trust's certificateholders. Cash generated from these transactions was used to
reduce short-term borrowings and to fund further credit card loan growth.
                                       
      The Company's liquidity needs and funding sources may change over time.
On September 16, 1996, the Company executed agreements for the following
credit facilities: (1) a $300 million, five-year revolving credit facility for
the Company (the "Revolving Credit Facility"), guaranteed by FCI; and (2)an
amendment to Series 1995-1 under the Metris Master Trust to (a) increase the
Class A Variable Funding Certificate to support a $400 million increase to
$1.2 billion (of which the Company may use up to $800 million) of the
Fingerhut Owner Trust Commercial Paper Program in which the Company
participates; and (b) issue $112.6 million of additional asset-backed
certificates (the "Certificates") to support the aforementioned increase in
the Commercial Paper Program.
                                       
        The Company borrows under the Revolving Credit Facility to fund on-
balance sheet loans and for other general business purposes.  At June 30, 1997
and December 31, 1996, the Company had outstanding borrowings of $49 million
and $50 million, respectively, under the Revolving Credit Facility.
                                       
         The Revolving Credit Facility is guaranteed by FCI and is further
supported by the pledge of the stock of certain subsidiaries of the Company
and certain accounts receivable and interests held therein by the Company. The
Revolving Credit Facility contains certain financial covenants standard for
revolving credit facilities of this type, including minimum net worth, minimum
equity to managed assets ratio, maximum leverage and a limitation on
indebtedness. In addition, the FCI guarantee includes certain covenants
including interest coverage, leverage and minimum net worth for FCI.
                                       
      The Federal Reserve Act imposes various legal limitations on the extent
to which banks that are members of the Federal Reserve System can finance or
otherwise supply funds to certain of their affiliates. In particular, Direct
Merchants Bank is subject to certain restrictions on any extensions of credit
to the Company or its subsidiaries. Additionally, Direct Merchants Bank is
limited in its ability to declare dividends to the Company. Therefore, Direct
Merchants Bank's investments in federal funds sold are generally not available
for the general liquidity needs of the Company or its subsidiaries. Such
restrictions were not material to the operations of the Company at June 30,
1997 and December 31, 1996.
                                       
     As the portfolio of credit card loans grows, or as the Trust certificates
amortize or are otherwise paid, the Company's funding needs will increase
accordingly. The Company believes that its asset securitization program,
together with the Revolving Credit Facility and other sources of capital, will
provide adequate liquidity to the Company for meeting its anticipated cash
needs, although no assurance can be given to that effect.
                                       
                               Capital Adequacy
                                       
      Direct Merchants Bank is subject to certain capital adequacy guidelines
adopted by the Office of the Comptroller of Currency ("OCC") and the Federal
Reserve Board, and monitored by the Federal Deposit Insurance Corporation and
the OCC. At June 30, 1997 and December 31, 1996, Direct Merchants Bank
exceeded the minimum required capital levels and was considered a "well-
capitalized" depository institution under regulations of the OCC.
                                       
                          Newly Issued Pronouncements
                                       
        In February 1997, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards No. 129, "Disclosure of
Information about Capital Structure," ("FAS 129") which codifies existing
disclosure requirements regarding capital structure.  FAS 129 will be required
to be adopted at year-end 1997 and is not expected to have a material impact
on the Company's current capital structure disclosures.
In June 1997, the FASB also issued Statement of Financial Accounting
Standards No. 131, "Disclosures about Segments of an Enterprise and Related
Information," ("FAS 131") which establishes standards for the way public
enterprises report information about operating segments in annual financial
statements and interim financial reports.  FAS 131 is effective for fiscal
years beginning after December 15, 1997.  The Company is evaluating the effect
adoption of this statement will have on the reporting of its financial
information.
                          Forward-Looking Statements
                                       
                                       
         This quarterly report contains forward looking statements within the
meaning of Section 27A of the Securities Act of 1993, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended.  These statements
include statements regarding intent, belief or current expectations of the
Company and its management.  Stockholders and prospective investors are
cautioned that any such forward-looking statements are not guarantees of
future performance and involve a number of risks and uncertainties that may
cause the Company's actual results to differ materially from the results
discussed in the forward-looking statements.  Among the factors that could
cause actual results to differ materially from those indicated by such forward-
looking statements are the Company's limited operating history as a stand-
alone entity; the Company's ability to obtain third parties to provide
extended service plans; the Company's limited experience with respect to
originating and servicing credit card accounts, including limited delinquency,
default and loss experience; the lack of seasoning of its credit card
portfolio, which makes the predictability of delinquency and loss levels more
difficult; risks associated with unsecured credit transactions, particularly
to moderate income consumers; interest rate risks; dependence on the
securitization of the Company's credit card loans to fund operations; general
economic conditions affecting consumer income, which may increase consumer
bankruptcies, defaults and delinquencies; state and federal laws and
regulations, including consumer and debtor protection laws; and the highly
competitive industry in which the Company operates.  Each of these factors is
more fully discussed in Exhibit 99 to the Company's Quarterly Report on Form
10-Q for the quarter ended March 31, 1997.  Reference to this Cautionary
Statement or Exhibit 99 in the context of a forward-looking statement or
statements shall be deemed to be a statement that any one or more of these
factors may cause actual results to differ materially from those anticipated
in such forward-looking statement or statements.
                                       
                                       
                                       
                                       
                                       
                          Part II.  Other Information


Item 4. Submissions of Matters to a Vote of Security Holders

        The annual meeting of the shareholders of the Company was held on May
19, 1997.  At the meeting, the shareholders elected Theodore Deikel
(18,998,770 votes for and 4,390 votes withheld), Ronald N. Zebeck
(18,998,770 votes for and 4,390 votes withheld), Dudley C. Mecum (18,998,570
votes for and 4,590 votes withheld), Michael P. Sherman (18,998,620 votes
for and 4,540 votes withheld) and Frank D. Trestman (18,998,620 votes for
and 4,540 votes withheld) to one-year terms as directors; approved the
Metris Companies Inc. Long-Term Incentive and Stock Option Plan (17,683,338
votes for, 64,875 votes against, 6,920 votes abstaining and 1,248,027 broker
non-votes) and approved the Metris Companies Inc. Annual Incentive Bonus
Plan for Designated Corporate Officers (18,901,034 votes for, 64,540 votes
against, 5,401 votes abstaining and 32,185 broker non-votes).


Item 6. Exhibits and Reports on Form 8-K


             (a) Exhibits:

                     10.a (v) Series 1997-1 Supplement, dated as of May 8,
             1997

                     11.     Computation of Earnings per Share

                     27.     Financial Data Schedule


             (b) Reports on Form 8-K:

                 None
                                  SIGNATURES


     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                             METRIS COMPANIES INC.






Date:  August 8, 1997              By:
                                   /s/ Robert W. Oberrender
                                   Chief Financial Officer
                                   (Principal Financial Officer)




Date:  August 8, 1997              By:
                                   /s/ Jean C. Benson
                                   Controller
                                   (Principal Accounting Officer)