Colleges and clubs help themselves as you help yourself with affinity cards

When it comes to branded moneymaking initiatives, it's not often that academic institutions are ahead of football clubs. However, it has taken Manchester United and Liverpool until last month to launch their own credit cards while UCD has had a credit card for graduates since 1991.

Indeed most Irish third-level institutions have long since spotted the fund-raising potential of offering these cards which are known as affinity cards.

The GAA has given permission to individual county boards to establish affinity partnerships. Already Wicklow, Mayo and Kildare GAA clubs have their own credit cards with several other county teams set to launch cards later this year.

All will have been heavily courted by the three affinity providers, AIB who offer visa cards, Bank of Ireland with Mastercard and MBNA, the US company and the most recent arrival in the Irish credit card market.

To understand what affinity cards are all about it helps to know their full title. In the credit card industry they are referred to as "affinity of the heart cards" because their attraction from a consumers' viewpoint is predominantly based on emotion or a sense of loyalty to a particular organisation.

Credit card companies pay their affinity partners a finders fee for every person they sign up and after that there's an ongoing payback system with the partner getting a small percentage of every card transaction. Trinity College has earned £100,000 (€127,000) from its affinity card scheme which it has operated with Bank of Ireland since 1994.

The idea that you are giving money to a favourite team, college or cause every time you use your credit card has the effect of increasing usage which is the payoff for the credit card provider while at the same time a feel-good factor for the consumer is created.

Affinity cards also provide the opportunity to get a credit card that offers interest rates up to 2 per cent lower than the standard rate plus the possibility of a substantial changeover sweetner for people willing to move from their existing credit card. The package being offered with Manchester United's card is typical of the affinity deals offered to MBNA card holders. A 19.9 per cent APR plus the ability to transfer existing credit card balances over for a reduced rate of 9.9 per cent APR that is fixed for the first six months. There is no annual fee and cardholders are entitled to free travel insurance which is the type of benefit usually only available on standard gold cards.

The Dublin Society for the Protection of Cruelty to Animals offers an affinity card through an MBNA card with the same financial incentives but adds free purchase protection insurance as its major incentive. This card also aims to be the first one that is pulled out of the wallet with its heart tugging picture of a kitten and a puppy.

University College Dublin's Bank of Ireland card plays heavily on graduate loyalty in the sales pitch with a slogan of "Help your alma mater while you help yourself". The APR is again 2 per cent less than the standard rate at 19.87 per cent and card-holders earn interest of 2 per cent on credit balances but the real incentive is the tangible sense of giving something back to the college.

Every time someone signs up for a new card, a £10 donation is made to either the Sports Fund or the ERA programme for disadvantaged students and applicants can specify their choice. Also, an ongoing portion of the amount spent on the card is given to the college. Therefore over the lifetime of the card the holder donates cash to the college without it costing the graduate a penny.

Increasingly charities such as The Hospice Foundation, Trocaire and Rehab are seeing the fund-raising potential in affinity cards and professional organisations are starting to sign up. In the US, medical and legal bodies have been enthusiastic affinity partners with a corresponding membership response.

The enthusiastic response is thought to be fuelled by the "wallet status" these cards bring with them. Research has shown consumers like the fact that the person at the till knows just by looking at the proffered credit card that the customer is a doctor or a lawyer.

In the Republic, the Kings Inn offers its own credit card complete with a picture of the Four Courts. The Irish Medical Organisation has one as does the Association of Certified Chartered Accountants.

As well as providing a financial boost for the affinity partners, having a branded credit card also has a marketing spin-off. Partners can include a mail shot in the monthly bill which can be integrated into other loyalty building initiatives. They can also include a message on the statement on their monthly bill.

Esat's credit card, through Bank of Ireland, and other co-branded cards differ from the college and supporters club cards. They are referred to in the industry as an "affinity of the wallet" cards because consumers are encouraged to sign up by the offer of a better deal for themselves. In Esat's case the card offers an attractive interest rate of 18.9 per cent plus 1 per cent cash back at the end of the year.

However co-branded cards can come with stiff penalties buried in the small print including up to a £10 charge for late payment and a £12 charge for exceeding the credit limit. For Esat and other companies such as Hibernian Insurance, co-branded cards work as brand builders and are perceived to encourage loyalty.