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
March 31, 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 April 30, 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




                              March 31, 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 6.    Exhibits and Reports on Form 8-K....................24

                Signatures..........................................25
Item 1.

METRIS COMPANIES INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(dollars in thousands) (unaudited)

                                                      March 31,   December 31,
                                                         1997          1996
Assets:
Cash and due from banks                             $   13,942      $   8,902
Federal funds sold                                      26,818         19,001
Short-term investments                                      86          4,179
  Cash and cash equivalents                             40,846         32,082
Credit card loans:
  Loans held for securitization                         61,778         14,164
  Retained interests in loans securitized              229,265        201,165
    Less: Allowance for loan losses                     19,357         12,829
  Net credit card loans                                271,686        202,500
Premises and equipment, net                              6,666          5,163
Accrued interest and fees receivable                     3,349          2,942
Prepaid expenses and deferred charges                    8,219          4,826
Deferred income taxes                                   40,748         31,528
Other assets                                             9,984          7,575
  Total assets                                      $  381,498      $ 286,616
Liabilities:
Interest-bearing deposit from affiliate             $               $   1,000
Short-term borrowings                                  102,000         54,163
Accounts payable                                        25,798         15,583
Other payables due to credit card
  securitizations, net                                  49,764         36,619
Current income taxes payable to FCI                     13,228          1,460
Deferred income                                         28,376         23,183
Accrued expenses and other liabilities                  15,876         15,890
  Total liabilities                                    235,042        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 per share;
  100,000,000 shares authorized, 19,225,000
  shares issued and outstanding                            192            192
Paid-in capital                                        107,220        107,220
Retained earnings                                       39,044         31,306
  Total stockholders' equity                           146,456
138,718
  Total liabilities and stockholders' equity        $  381,498      $ 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
                                                         March 31,
                                                    1997           1996
Interest Income:
Credit card loans                               $   11,934      $   5,356
Federal funds sold                                     306            318
Other                                                  190             29
  Total interest income                             12,430          5,703
Interest Expense:
Deposit                                                  7             12
Short-term borrowings                                1,452          1,085
  Total interest expense                             1,459          1,097
Net Interest Income                                 10,971          4,606
Provision for loan losses                           11,054          4,690
Net interest expense after provision for
  loan losses                                          (83)           (84)
Other Operating Income:
Net extended service plan revenues                     289          4,176
Net securitization and credit card
  servicing income                                  26,533         13,438
Credit card fees, interchange and
  other credit card income                           7,602          3,124
Fee-based product revenues                          11,824          4,628
                                                    46,248         25,366
Other Operating Expense:
Credit card account and other product
  solicitation and marketing expense                 7,721          7,538
Employee compensation                                7,953          3,008
Data processing services and communications          5,011          2,292
Third party servicing expense                        2,970          2,159
Warranty and debt waiver underwriting
  and claims servicing expense                       1,216          1,788
Credit card fraud losses                               899            336
Other                                                7,813          1,892
                                                    33,583         19,013
Income Before Income Taxes                          12,582          6,269
Income taxes                                         4,844          2,414
Net Income                                      $    7,738      $   3,855

Earnings per share:
Primary                                         $      .38      $     .23
Fully diluted                                   $      .38      $     .23

Weighted-average common and common
  equivalent shares (fully diluted)                 20,173         16,476
                                     
                                     
       See accompanying Notes to Consolidated Financial Statements.
METRIS COMPANIES INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(dollars in thousands) (unaudited)

                                                           Three Months Ended
                                                                  March 31,
                                                            1997
1996
Operating Activities:
Net income                                              $   7,738   $   3,855
Adjustments to reconcile net income to net cash                       
  provided by operating activities:
  Provision for loan losses                                11,054       4,690
  Depreciation and amortization                             2,382       1,583
  Net amortization of gain on securitization
    of credit card loans                                    1,039       1,835
  Changes in operating assets and liabilities:                        
  Accrued interest and fees receivable                     (407)          300
    Other payables due to credit card
     securitizations, net                                  11,947       4,646
    Prepaid expenses and deferred charges                  (5,109)     (3,343)
    Deferred income taxes                                  (9,220)     (2,433)
    Accounts payable and accrued expenses                  10,201      (1,125)
    Current income taxes payable to FCI                    11,768       3,973
    Deferred income                                         5,193       3,759
    Other                                                  (2,614)       (116)
Net cash provided by operating activities                  43,972      17,624

Investing Activities:
Proceeds from sales of loans                              125,000      64,000
Net loans originated or collected                        (165,436)   (134,980)
Credit card portfolio acquisition                         (39,804)  
Additions to premises and equipment                        (1,805)       (564)
Net cash used in investing activities                     (82,045)    (71,544)

Financing Activities:
Decrease in interest-bearing deposit                       (1,000)  
Net increase in short-term borrowings                      47,837      30,331
Net cash provided by financing activities                  46,837      30,331

Net increase (decrease) in cash and cash equivalents        8,764     (23,589)
Cash and cash equivalents at beginning of period           32,082      34,743
Cash and cash equivalents at end of period              $  40,846   $  11,154


       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

Statements of Cash Flow

     Cash paid for interest during the three months ended March 31, 1997 and
1996, was $1.5 million and $1.1 million, respectively.  Cash paid for income
taxes for the same periods was $15.0 million and $9.6 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 reorganization that occurred during September 1996 (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 FASB 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 and requires companies to restate prior-
period EPS for all periods in which an income statement is presented.

     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 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.

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 ("Investor Deposit"), 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
                                                                 March 31,
(in thousands)                                              1997
1996
Balance at beginning of period                           $  12,829  $   3,679
Allowance related to assets acquired, net                      806
Provision for loan losses                                   11,054      4,690
Loans charged-off                                            5,450      1,660
Recoveries                                                     118         36
Net loan charge-offs                                         5,332      1,624
Balance at end of period                                 $  19,357  $   6,745


NOTE 5 - SHORT TERM BORROWINGS

     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 March 31,
1997 and December 31, 1996, the Company had outstanding borrowings of $102
million and $50 million, respectively, under the Revolving Credit Facility.
The interest rates on the Revolving Credit Facility borrowings at March 31,
1997 and December 31, 1996 were 6.6% 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.


NOTE 6 - SUBSEQUENT EVENTS

     On April 30, 1997, the Company declared its first quarterly dividend in
the amount of $.01 per share, aggregating approximately $.2 million, payable
on May 15, 1997, to shareholders of record as of the close of business on May
13, 1997.

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

ITEM 2.

     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 and 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 also provides extended service plans that extend warranty
service coverage beyond the manufacturer's warranty on selected products sold
by Fingerhut, an affiliate. 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 March 31, 1997, was $7.7 million,
or $.38 per share, up 101% from $3.9 million, or $.23 per share for the first
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
$1.7 billion for the first quarter 1997 from $610 million for the first
quarter 1996, an increase of 181%.


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 on the Company's
consolidated financial statements from securitization 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 current quarter, 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 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' share of securitized credit card loans. The investors' share of
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.


                                                        March 31,
                                                    1997         1996
Dollars in thousands
Period-end balances
Credit card loans:
  Loans held for securitization                 $   61,778   $  71,539
  Retained interests in loans securitized          229,265      92,880
  Investors' interests in securitized loans      1,525,610     512,555
Total managed loan portfolio                    $1,816,653   $ 676,974


                                                 Three Months Ended
                                                      March 31,
                                                   1997          1996
Dollars in thousands
Average balances
Credit card loans:
  Loans held for securitization                $   36,657    $  22,280
  Retained interests in loans securitized         217,455       90,176
  Investors' interests in securitized loans     1,456,977      497,303
Total managed loan portfolio                   $1,711,089    $ 609,759


     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
                                                      March 31,
                                                   1997          1996
Dollars in thousands
Statements of Income (owned basis)
  Net interest income                       $     10,971     $   4,606
  Provision for loan losses                       11,054         4,690
  Other operating income                          46,248        25,366
  Other operating expense                         33,583        19,013
  Income before income taxes                $     12,582     $   6,269

Adjustments for Securitizations
  Net interest income                       $     47,452     $  17,040
  Provision for loan losses                       45,168        10,278
  Other operating income                          (2,284)       (6,762)
  Other operating expense
  Income before income taxes                $                $
Managed Statements of Income
  Net interest income                       $     58,423     $  21,646
  Provision for loan losses                       56,222        14,968
  Other operating income                          43,964        18,604
  Other operating expense                         33,583        19,013
  Income before income taxes                $     12,582     $   6,269

Other Data:
Owned Basis
Average interest-earning assets             $    291,375     $ 138,488
Return on average assets                             9.1%          8.3%
Return on average equity                            21.9%         21.0%
Net interest margin (1)                             15.3%         13.4%
Managed Basis
Average interest-earning assets             $  1,748,352     $ 635,790
Return on average assets                             1.8%          2.3%
Return on average equity                            21.9%         21.0%
Net interest margin (1)                             13.6%         13.7%

(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 March 31, 1997,
was $58.4 million compared to $21.6 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 table provides an analysis of interest income and expense,
net interest spread, net interest margin and average balance sheet data for
the three month periods ended March 31, 1997 and 1996:
Analysis of Average Balances, Interest and Average Yields and Rates

<TABLE>
                                      Three Months Ended March 31,
                                         1997             1996
                            Average                Yield/      Average                Yield/
                            Balance     Interest    Rate       Balance    Interest    Rate
Dollars in thousands

Owned Basis
Assets:
Interest-earning assets (1)
Federal funds sold         $  23,441    $   306      5.3%    $   23,835  $   318      5.4%
Short-term investments        13,822        190      5.6%         2,197       29      5.3%
Credit card loans            254,112     11,934     19.0%       112,456    5,356     19.2%
Total interest-earning
  <S>                      <C>          <C>         <C>      <C>         <C>         <C>
  assets                   $ 291,375    $12,430     17.3%    $  138,488  $ 5,703     16.6%

Cash and due from banks       10,785                              2,952   
Accrued interest and fees      2,674                              1,826
Other amounts due from
  securitizations                                                27,218
Other assets                  55,808                             22,208
Allowance for loan losses    (16,716)                            (5,161)
  Total assets             $ 343,926                         $  187,531
Liabilities and Equity:
Interest-bearing
  liabilities:
Interest-bearing deposit   $     667    $     7      4.6%    $    1,000  $    12      4.8%
Short-term borrowings         83,078      1,452      7.1%         3,213    1,085      6.0%
  Total                       83,745      1,459      7.1%        74,213    1,097      5.9%
Other liabilities            116,857                             39,560    
Total liabilities            200,602                            113,773
Stockholders'/division
  equity                     143,324                             73,758
Total liabilities and
  equity                   $ 343,926                         $  187,531
Net interest income and
  interest margin (2)                   $10,971     15.3%                $ 4,606     13.4%
Net interest rate
  spread (3)                                        10.2%                            10.7%

Managed Basis
Credit card loans          $1,711,089   $80,350     19.0%    $  609,759  $29,377     19.4%
Total interest-earning
  assets                    1,748,352    80,846     18.8%       635,790   29,724     18.8%
Total interest-bearing
  liabilities               1,540,721    22,423      5.9%       571,515    8,078      5.7%
Net interest income and
  interest margin (2)                    58,423     13.6%                 21,646     13.7%
Net interest rate
  spread (3)                                        12.9%                            13.1%
</TABLE>
(1)  There were no taxable equivalent adjustments necessary for the periods
presented.
(2)  Net interest margin is computed by dividing annualized net interest
income by average total interest-earning assets.
(3)  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

                                               Three Months Ended
                                                    March 31,
                                            1997              1996
Dollars in thousands

Other Operating Income:
Net extended service plan revenues        $    289         $   4,176
Net securitization and credit card
  servicing income                          26,533            13,438
Credit card fees, interchange and
  other credit card income                   7,602             3,124
Fee-based product revenues                  11,824             4,628
  Total                                   $ 46,248         $  25,366

     Other operating income contributes substantially to the Company's
results of operations, representing 79% of owned revenues for the three
months ended March 31, 1997.  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 its partners.

     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 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 about 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, shopping and
dining clubs, and revenues from targeted list programs.

     Other operating income increased $20.9 million for the three months
ended March 31, 1997, over the comparable period in 1996, primarily due to
income generated from the growth in average securitized credit card loans.
Additionally, fee-based product revenues increased by $7.2 million because of
the Company's marketing efforts to cross-sell other products and services to
its customers.  Specifically, debt waiver product revenue increased by $6.2
million as the Company continued to add new credit card customers with debt
waiver protection.

     Net extended service plan revenues decreased by $3.9 million in the
first quarter of 1997 compared to the first quarter of 1996.  This decrease
reflects that the Company assumed responsibility for claims processing and
underwriting on contracts sold on or after January 1, 1997.  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 first quarter 1997 were consistent with the first quarter of 1996.

Other Operating Expense

                                             Three Months Ended
                                                  March 31,
 Dollars in thousands                      1997             1996

Other Operating Expense:
Credit card account and other product
  solicitation and marketing expense    $   7,721       $   7,538
Employee compensation                       7,953           3,008
Data processing services and
  communications                            5,011           2,292
Third party servicing expense               2,970           2,159
Warranty and debt waiver underwriting
  and claims servicing expense              1,216           1,788
Credit card fraud losses                      899             336
Other                                       7,813           1,892
  Total                                 $  33,583       $  19,013


     Total other operating expenses for the three months ended March 31,
1997, increased $14.6 million over the comparable period in 1996, primarily
due to 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 and the internalization of
various credit card operating functions, and increased management incentive
plan expenses.  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 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 months
ended March 31, 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 success 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
losses from these negative industry trends.  At March 31, 1997, 59% of
managed accounts and 47% 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.

     These trends are reflected in the increase in the Company's net charge-
off ratio.  For the quarter ended March 31, 1997, the Company's net charge-
off ratio stood at an annualized rate of 8.5% compared to 5.8% for the
quarter ended March 31, 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 margins 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
                                             
                       March 31,      % of      March 31,      % of
                           1997        Total        1996        Total
                                                                 
Dollars in thousands
Managed loan porfolio  $1,816,653      100%       $676,974      100%
Loans delinquent:
  30 to 59 days            37,466     2.06%          9,677     1.43%
  60 to 89 days            24,820     1.37%         5,879      0.87%
  90 or more               46,418     2.55%        10,046      1.48%
    Total              $  108,704     5.98%       $25,602      3.78%
                     
     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
                                                    March 31,
                                              1997           1996
Dollars in thousands
On-balance sheet portfolio:
  Average loans outstanding             $   254,112      $   112,456
  Net charge-offs                             5,332            1,624
  Net charge-offs as a percentage
    of average loans outstanding (1)           8.51%            5.81%

Managed loan portfolio:
  Average loans outstanding             $ 1,711,089      $   609,759
  Net charge-offs                            35,888            8,761
  Net charge-offs as a percentage
    loans outstanding (1)                      8.51%            5.78%

(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 months
ended March 31, 1997 and 1996, totaled $11.1 million and $4.7 million,
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 increase
for the three month period ended March 31, 1997, as compared to the three
month period ended March 31, 1996, is primarily reflective of the overall
maturation of the portfolio and the increase in on-balance sheet loans
outstanding.  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
                                                       March 31,
Dollars in thousands                             1997            1996
(Owned Basis)
Balance at beginning of period               $  12,829      $   3,679
Allowance related to assets acquired, net          806
Provision for loan losses                       11,054          4,690
Loans charged-off                                5,450          1,660
Recoveries                                         118             36
Net loan charge-offs                             5,332          1,624
Balance at end of period                     $  19,357      $   6,745


Ending allowance as a
  percent of loans                                6.65%          4.10%



                                                Three Months Ended
                                                     March 31,
Dollars in thousands                            1997            1996
(Managed Basis)
Balance at beginning of period               $  95,669      $  22,219
Allowance related to assets acquired, net          806
Provision for loan losses                       56,222         14,968
Loans charged-off                               36,682          8,944
Recoveries                                         794            183
Net loan charge-offs                            35,888          8,761
Balance at end of period                     $ 116,809      $  28,426


Ending allowance as a
  percent of loans                                6.43%          4.20%

Derivatives Activities

     The Company uses derivative financial instruments for the purpose of
managing its exposure to interest rate risks and has a number of 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%.  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.  The Company receives
the benefits and bears the obligations of these swap transactions.  The
obligations of the Company and the counterparties under these swap agreements
are settled on a monthly basis.

     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.  Total notional
amount of this swap transaction amounted to $722.5 million.

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 March 31, 1997, the Company had
received cumulative net proceeds of approximately $1.5 billion from sales of
credit card loans, of which $20.0 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 March 31,
1997 and December 31, 1996, the Company had outstanding borrowings of $102
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 March
31, 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 March 31, 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

     Also in February 1997, the 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 corporation's current capital
structure disclosures.

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 this Form 10-Q.  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 6. Exhibits and Reports on Form 8-K


             (a)  Exhibits:

                  11   Computation of Earnings per Share

                  27   Financial Data Schedule

                  99   Cautionary Statement Regarding Forward Looking
                       Statements


             (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:                              By:
                                   /s/ Robert W. Oberrender
                                   Chief Financial Officer
                                   (Principal Financial Officer)




Date:                              By:
                                   /s/ Jean C. Benson
                                   Controller
                                   (Principal Accounting Officer)