Why Affinity Cards?

by : TA Honey

Affinity cards are cards which link two factors, a lending body and an associated group. Use of affinity cards may give the holder an added advantage in form of discounts, and certainly offers an associated/affinity deal with group/s associated with service providers.

Like other credit cards, affinity cards offer credit facility and may charge interest after expiry of the grace period. The distinct feature of an affinity card is an added association with a cause which may range from football to various other non-profit organizations. The emotional appeal of contribution to a social cause while you make your purchases is great.

Affinity cards are sometimes confused with co branded cards. Co branded cards come with associated company and the benefits are not targeted towards a non-profit organization or an affinity group, rather these are associated with the company offering benefits to the customers.

APRs on affinity cards range from 15 to 22 percent, the competition in the credit card segment has affected the credit card rates offered by these credit card companies. Affinity cards comparatively may turn out to be more expensive than a competitive credit card in the long run due to higher interest rate charged.

What is the factor which makes affinity card segment so popular? Market research suggests that affinity card segment is bound to grow and the major reason for popularity of affinity credit cards in UK is not solely the added benefits offered to the customer or luring of cheap or competitive affinity cards/ low rate affinity cards. The driving factor is not money but the association with a philanthropic cause. Affinity cards may turn out to be a little more expensive than credit cards because of a higher interest rate, though someone who pays off the balance without generating much interest may find affiliate cards really relevant.

affinity cards as a marketing/promotional strategy, bank on emotions. They appeal to the customer on philanthropic grounds.