The Lowdown: MBNA's chief of staff fires plastic bullets

He used to command the US Marines. Charles Krulak tells Sonia Purnell why he's now defending the credit card industry

That's a picture I took myself," says General Charles "Chuck" Krulak, pointing to a photograph of a trio of middle-aged men sharing a joke against a dramatic background of Manhattan skyscrapers. "Bush Snr, Reagan and Gorbachev came out clear enough, but everything else is out of focus," he laments.

This 1980s snap - together with a dozen others on his office walls - demonstrates what exalted company he kept in his former life. There are few UK banking chiefs (actually there are none) who can lay claim to having been Commandant of the US Marines, a senior presidential adviser and member of the US joint chiefs of staff.

Yet since 2001 General Krulak has forsaken the heady challenge of running the Western world's defence strategy for the less obvious excitements offered by being chief executive of the Chester-based European operations of the US credit card giant MBNA. These days, he can be found addressing the Chester and Ellesmere Port Chamber of Commerce rather than hobnobbing with presidents on Air Force One.

However, his past clearly informs almost every aspect of the way in which he conducts himself in his new career, heading a bank with six million credit cards with a total balance outstanding of no less than £9.4bn.

For example, as if preparing for battle with a particularly cunning enemy, he researched and rehearsed his answers for months before appearing in front of the recent hearing of the Treasury Select Committee looking at the consumer credit boom. So while the Barclays chief executive Matt Barrett fell straight into the trap laid for him by MPs and "did a Ratner" on his own financial products, Krulak was able to emerge from the gunsmoke virtually unscathed.

A surprisingly youthful 61, "the General" - as he likes to be known by his MBNA staff - has that unfailingly cheerful, brisk and precise demeanour typical of military men. His analysis of his competitors in the UK credit card market, of which MBNA's slice now accounts for 15 per cent, is also peppered with military allusions. "I was never afraid of soldiers. I fought against the North Vietnamese and the Iraqis but I always respected them," he explains. "Just like I'm not afraid of Barclays, Royal Bank of Scotland or the others, but I respect them as worthy adversaries. With that respect and understanding, you're probably going to come out fairly successful."

And in an aside perhaps intended for Barrett's consideration, Krulak adds: "It's just when you think you've got your enemy bottled up that you're really in trouble."

That's not to say the relative safety and comfort of a career in banking is lost on him. Pointing to yet another photo in his office, this time showing him in 1997 with the other joint chiefs of defence staff, he singles out one former colleague who committed suicide and another who had to quit under the strain. "The problems of national security are quite a different thing to running a bank," he says, "however bad a day you might have."

Running a bank was never a career envisaged by Krulak, a slight but super-fit and active man. On retiring from military service, during which he undertook two 13-month tours of duty in Vietnam, fought in the first Gulf War and covered most of his chest with medals, he was showered with job offers from the American Red Cross and a major dot com, among others.

Financially, he was already set up nicely for retirement and had no need to go back to work. But Krulak is not the sort of man to give up on the action.

"I ran into MBNA a number of times over the period of a year," he says. "I was impressed by the people and, more importantly, by their value system, which was laid out in a number of precepts on the back of their business cards.

"These were similar types of people to the ones I'd been around in the military: they were focused but they also cared about each other. People here dress smart and think smart."

On the walls of MBNA's Chester offices are a variety of folksy homilies for the benefit of the 4,000 staff now toiling away there. "Mediocrity is within anyone's reach," it says in the vast space where staff process applications for credit cards or increased credit limits. "There's nothing as great as being the best."

Krulak's favourite, however, is: "Complacency is devastating." Perhaps that was the key message the combative Ken Bates, chairman of Chelsea Football Club, wanted him to convey when he invited Krulak to give a motivational talk to the squad on the eve of last season's vital game against Liverpool. Chelsea went on to win the match, a place in the Champions League and, indeed, the invaluable support of their new billionaire owner, Roman Abramovich. It could be said that Krulak was, in part, responsible.

He will not be held to account, however, for Britain's less glorious credit bonanza. While admitting to knowing nothing about finance before joining MBNA, he is adamant our national plastic addiction is not much to worry about.

"Purchasing today with tomorrow's earnings is what free enterprise is all about," he insists. "Just spending what you have now doesn't stimulate the economy, but holds it back. Where we get into trouble is where there are life-changing events such as divorce, illness or unemployment. But an upstanding organisation such as ours actually keeps people from getting too far into debt, by working with them, so they can overcome these crises."

Nor does he believe that regulation spells trouble for the industry, welcoming the Government's moves last week to modernise the Consumer Credit Act, and in particular the new rules on summary boxes, which MBNA has helped pioneer.

Krulak reserves his heavy artillery for those who claim the credit card industry is "feeding over-indebtedness".

"No one wants to lend money to someone who can't pay it back. When they can't pay, they get a stigma and we don't get the money. The reality is that 60 per cent of those who apply to MBNA don't get a credit card.

"Hell, in the US military you don't make a whole lot of money. I didn't always earn enough to get a credit card myself."