Fans score a costly own goal with football finance

Football branded financial products are now big business. But are they any good? James Daley reports

It might seem as if the World Cup has only just come to an end, but Premiership football kicks off this afternoon and the clubs want your money. Fans may have already splashed out £40 a new strip, but football-branded financial services products, from credit cards to mortgages, are becoming ever more important sources of revenue.

On the plus side, all profits made by the clubs are reinvested into their facilities and coaching, often in the development of the club's youth squad. But while football finance gives fans another way to show their support, they are often poor value.

The average football club savings account pays a starting rate of interest rate of just 2 per cent a year - some 2.75 per cent below the current Bank of England base rate. Rates sometimes increase once the balance in your account passes £1,000 or £2,000, but many of the top rates are still at least 1 per cent below the market-leading rates. In other words, savers who opted for a market leading savings account, paying around 4.5 per cent interest, could beat the 1 per cent donation paid by the typical savings account and still earn a much higher rate on their savings.

There are exceptions. Wolverhampton Wanderers, which offers an account run by Birmingham Midshires, pays a competitive 4.5 per cent, and still donates 0.3 per cent to the club.

Most club savings accounts for children are also competitive. Although Arsenal's adult savings account pays starting interest of just 2.05 per cent, its children's account pays a more respectable 4.5 per cent. The club receives 1 per cent of all balances from Britannia Building Society regardless of whether the accounts are held by adults or children.

However, there are many more examples of clubs which offer their supporters a poor deal. The same rule applies when it comes to football club insurance deals. Arsenal and Manchester United both offer car, home and travel insurance to customers, backed by Endsleigh Insurance.

When we asked the price comparison site Moneysupermarket to run a comparison of its prices against the market leaders, it concluded that the clubs were generally more than twice as pricey as the cheapest provider.

Although club-related personal loans are also relatively uncompetitive, the few mortgage packages that are available are better value. Man United and Man City offer competitive two-year variable rates of 4.8 per cent - not market leaders, but not far off. With mortgages and insurance, the club tends to receive a one-off commission from the provider for bringing them the business. Credit cards, like savings accounts, provide an ongoing stream of income to your club.

Almost all of the club credit cards are run by MBNA, and charge an interest rate of 15.9 per cent - not best buy, but not bad either, especially since from today, all MBNA football card customers will also qualify for MBNA's reward scheme. Customers get a point for every pound they spend on their card. Points can be exchanged for gifts and days out - or, in the case of football cards, for merchandise.

Fulham card holders can exchange points for shirts and match balls. Man United cardholders are entered into a weekly prize draw for similar gifts - if they spend at least £50 a week.

Andrew Hagger of Moneyfacts, the comparison service, says that whilst there are many more competitive rates on the market, cards can be worthwhile for sensible borrowers. Although MBNA would not disclose what percentage it pays to clubs, Hagger suggests that fans could probably give more back by taking out a market leading cash-back card, and donating the refunds.

Norwich & Peterborough Building Society has signed a deal with the Football League, to offer 20 new "Club Saver Accounts" for clubs from the Championship to League Two as well as some Conference teams. These won't necessarily be better value than the accounts offered by the big clubs, but your small local team is, arguably, more deserving of help.

Big football clubs can behave like big banks

* Manchester United may not have won the Premiership for four years, but the club continues to lead the way in financial services, selling everything from credit cards to mortgages to cash Isas. However, while loyal fans may be a captive audience, financial experts think supporting the club this way could be an own goal.

* Rather than paying top rates, the club goes in for gimmicky bonuses based on the team's performance. For example, savers will receive an extra 1 per cent interest this month and next, due to the club's qualification for the Champions League, while insurance customers may get a discount on renewal premiums depending on how many goals the club scores in a season.

* Peter Gerrard, of price comparison service Moneysupermarket, says: "If people really want to help their team, they'd be better looking out for the cheapest policy and giving the money they save to their club."

* However, Stephen Falk, the director of Manchester United Financial Services, says the club's aim is to find partners with products which are amongst the top quartile in their sector. "We don't try to have the absolute market leading rate because we're creating products which are available for everyone," he says.

* Falk also points out that Manchester United fans don't seem to be able to get enough of their club's financial products. While MU Finance had just 35,000 customers five years ago, it now has some 443,000.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

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