Your Money: Accounts for twitchers and football supporters

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The Independent Online
Twitchers and other bird-lovers have netted the RSPB pounds 2m simply by using a credit card - and effectively it's not cost the cardholders a penny.

Affinity credit cards - where the issuer (Co-operative Bank in the case of the RSPB card) makes a donation to a charity or other linked cause when you take the card out and as you spend - are well-established.

You've used the credit card, now open the savings account. With the interest on your average savings account now looking as enticing as yesterday's toast, savings institutions keen to differentiate their meagre offerings could jump on the bandwagon by launching affinity accounts. So far, such accounts are rare, but we do seem to be heading in that direction.

Ethical banks (see page 16) are picking up savers with the promise that they will not lend to unethical companies.

Birmingham Midshires building society, the hottest tip for the next takeover windfall, says it could launch affinity accounts as part of its proposed "community investment strategy" (see page 2) - an idea that could make it one of the financial world's biggest corporate givers.

Interestingly, it is Birmingham Midshires' near-neighbour and one of its mooted merger partners, the West Bromwich building society, which offers one of the very few affinity-type accounts that actually triggers direct financial donations. It pays 1 per cent a year of average balances in its Albion Premier Saver account to West Bromwich Albion football club - the "Baggies" to their supporters. The club could benefit by pounds 100,000 over the next year.

Another society, the Chelsea, this week said it would make a pounds 1 donation to a combination of three charities for each of its 20-day notice accounts opened.

The West Brom says there is clearly support for such deals, as demonstrated by the signing of 8,000 savers for its Albion account - a fair proportion of the Baggies' average gate.

Affinity credit cards need not cost users anything, and card companies don't have to lose out either. They may work on lower margins - the donations effectively coming out of the commissions they earn from retailers and the like when the card is used - but arguably cardholders will be more loyal, which should translate into greater card use and higher earnings for the issuer.

Likewise it is also not unreasonable to hope for affinity accounts where savers don't lose out on interest. If accounts do offer less interest, savers should question whether they wouldn't be better off saving elsewhere and making donations themselves.

With the West Bromwich Albion account, savers earn interest of 2.25 per cent on balances of pounds 250 upwards. In itself this is hardly inspiring, but it is quite competitive for such small amounts of money.

If building societies are going to talk loudly about being able to offer a better deal than the banks because they don't have outside shareholders demanding dividends, they should also be able to remain competitive while making charitable donations on an affinity account.

Competitive affinity accounts are also something some of the smaller banks should be able to fund. In many cases these banks offer competitive interest rates while paying commission to financial advisers who introduce savers to them. If they can afford that, they should be able to afford to offer the same accounts in affinity form. Given the link to a worthy cause, it would be easier to sell these accounts directly, and the commission saved could be used to fund the charitable donations.