Team loyalty can prove to be a costly own goal

Football club accounts and credit cards appeal to fans but the gains can be one-sided. Chiara Cavaglieri and Julian Knight report

Across the country, football fans will once again be donning scarves and handing over their hard-earned readies to see their favourite team strut their stuff.

But some clubs ask fans to go that extra mile in the loyalty stakes by signing up to a club-sponsored financial product. Many clubs, both big and small, raise funds by offering savings accounts, credit cards and even mortgages. But are these just marketing gimmicks used to take advantage of hardcore loyalty?

These "affinity" products are run by banks and building societies which donate a percentage of the balance to teams. With savings accounts, clubs receive an annual bonus which varies from 0.5 per cent to 1.25 per cent and is based on the average total balance held in all club savers accounts. Some of the contribution totals are impressive and can be crucial for smaller teams trying to keep their heads above water. Savers with a Norwich & Peterborough building society account, for example, have contributed over £2.9m to Norwich City over the past 12 years. Even more impressively, youth development at Ipswich Town has benefited from £6.5m since the launch of its Britannia affinity account in 1998.

Supporters can also get additional benefits by signing up. Stoke City fans save 10 per cent on purchases at the club shop, for example, and the Derby Rams account offers two match tickets upon opening the account. "The money provides a vital lifeline to clubs outside of the Premier League and a lot of the funds tend to be used to help develop youth academies," says Andrew Hagger from financial information service Moneyfacts.

The crucial issue with affinity accounts, though, is that they do not offer good value in comparison with other products, and fans hoping for a good performance from their savings account will be disappointed. Generally, these accounts offer a low rate of interest on the understanding that the club receives an annual payment. However, with the base rate at 0.5 per cent, several of these accounts are paying as little as 0.05 per cent.

At the beginning of last season the average interest rate on a football savings account was 2.47 per cent, but that has taken a nosedive to 0.19 per cent, according to research from Moneynet. Wolverhampton Wanderers fans have seen the biggest fall from 5.25 per cent to 0.75 per cent, followed by Derby County, with a drop from 4.45 per cent to 0.10 per cent.

"If it's a decent rate of return that you're after then these affinity accounts are not for you," says Mr Hagger.

Other instant access accounts offer much more. For example, the online saver from Alliance & Leicester pays 3.15 per cent. Scottish Widows Bank offers the best affinity savings account for Portsmouth fans, paying 2.20 per cent, but this includes a 1 per cent bonus for six months and pays the club only up to 0.5 per cent of balances. That is £500,000 if supporters deposit a combined total of £10m.

For Premiership giants that isn't a huge amount of dosh, about a month's wages for one of their star performers. But further down the footballing food chain, a few hundred thousand can make the difference between staying in and going out of business.

The best buy instant access savings account is currently offered by the West Bromwich Building Society paying 2.8 per cent on deposits over £1,000. Those savers willing to tie up their money for a period of time can expect an even higher return. The Post Office, for instance, is offering a one-year bond with a rate of 3.85 per cent. On £10,000 saved that is pre-tax return of £385. The same amount of money in an average paying football club savings account would return just £19.

What's more, it is worth bearing in mind that no football club savings account is offered as an individual savings account. This means that the paltry return made has tax of 20 per cent automatically deducted. Savers can put up to £3,600 each year into a cash ISA and earn tax-free interest.

With such poor rates it seems more prudent for fans to pick an account paying a high interest rate and donate to the club in other ways, or simply spend more money in the club shop.

Affinity credit cards, however, are a different story. They not only offer reasonable deals on introductory balance transfers and purchases but also offer reward points. As with affinity savings accounts, the chosen team receives an income from the provider. At the moment, credit cards are affiliated only with bigger teams, predominantly from the Premiership, including Liverpool, Manchester United and Tottenham Hotspur. All of these are issued by MBNA and have a 0 per cent introductory period of 12 months on balance transfers, three months on purchases and a typical APR of 15.9 per cent thereafter. Then, every £1 spent on card purchases accrues one reward point which can then be used on club merchandise.

"Football credit cards are fairly competitive. They are certainly on a par with other leading credit cards, and you even get points to spend at your chosen club," says Peter Harrison, credit cards expert at comparison website Moneysupermarket.com.

Looking beyond football affinity cards, the longest balance transfer period on the market is Virgin, offering an interest-free period for 16 months and three months on purchases, with a typical APR of 16.6 per cent. The lowest rate card without a minimum income limit is the Barclays platinum, charging 12.4 per cent. Overall, although not quite best buys, the football credit cards are up there with many of the better deals around, including MBNA's own platinum card which offers 0 per cent on balance transfers until September 2010 and on purchases until November 2009, with a typical APR of 15.9 per cent.

Whether savings or card, most affinity products are unlikely to hit the top spot of the best-buy tables. However, for some fans it is a sacrifice worth making to support their team financially as well as in spirit.