Fans pay high price for club cards

Thousands of Arsenal and Man United fans are paying over the odds for their football club credit cards. Many fans hold club affinity cards supplied to both clubs by the same American bank and are paying more than they should for their credit.

The cost of debt has been a recent topic for Old Trafford fans since Malcolm Glazer’s takeover but it now transpires that many fans are paying more for their credit than the American entrepreneur.

The affinity cards are issued by MBNA, as are those supplied to Chelsea, Everton and Liverpool fans, and are all charged the same APR of 15.9 per cent.

All offer nine months interest-free introductory offers on balance transfers but it is a clause in the terms and conditions that customers should be aware of.

Basically, payments made on these cards will be deducted from the interest-free balance transferred first and so won’t be deducted from any debts run up on the card through purchases. This debt will incur the 15.9 per cent interest.

According to Stuart Glendinning from Moneysupermarket.com:“ The kudos of holding your club’s card in your wallet is understandable, yet football fans would be well advised to check exactly what benefits they will derive from their team card compared with the benefits available on a normal non-affinity card.”

By comparison, credit cards such as the Halifax One Visa, offer nine months interest-free on balance transfers and purchases, reverting to an APR of 12.9 per cent once the introductory offer has expired.

Those who struggle to pay off their credit card balance should note that making the minimum monthly payments will only succeed in prolonging their debt and will see interest payments rocket.

According to APACS, the UK payments association, 11 per cent of card owners currently pay the minimum payment or less. Moneysupermarket.com calculate that it could take up to 27 years to typical credit card debt of £2,100 by making only minimum repayments,

On a card that requires a 2 per cent minimum payment, with an APR of 14.9 per cent, a cardholder could rack up £2,700 in interest. Simply by increasing payments to 5 per cent of the balance each month could cut the time it takes to pay off the balance to eight years and four months, saving a whopping £2,100 in interest.

Many providers are now lowering the minimum repayment requirements from 5 per cent to 2 per cent, resulting in the debt being prolonged over a longer period and leading to more interest being paid over the term.

29/5/05

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