An affinity with a flexible trend

''The Star Trek card came about because there was an exhibition in Edinburgh about three years ago,'' said Alex Steven, who has the delightful title of director of affinities at Bank of Scotland.

''We found a lot of interest in Star Trek and therefore we approached the Star Trek licence owners in the US. There was already a Star Trek card in the US and we launched one in this

country here. I am a Trekkie myself.''

That kind of ... well, affinity ... has led to the bank becoming the world's second largest issuer of affinity cards after MBNA and the leader in the UK, with more than 500 different cards in circulation.

Affinity cards are credit cards which are connected with a particular organisation. They answer a need for people who are looking for alternatives to the traditional High Street bank cards and want to show their affinity to a charity, football club, professional organisation or even a particular interest.

The James Bond card came about with the movie, Tomorrow Never Dies. ''There was going to be product placement for the James Bond movie,'' said Steven. ''The producers came up with the idea of a Visa card.

''We released a James Bond card though the scene was no longer in the movie. But the

card has been very successful because people associate with the James Bond lifestyle.''

The card bears the Bond silhouette at the end of the famous rifled gun barrel, though what Her Majesty's Secret Service would say about its agents advertising their present remains classified information.

An Elvis Presley card fits better with the star's more flamboyant lifestyle. ''We have Elvisly Yours. There is a fan club in the UK and lots of people who would like to buy memorabilia.''

More than two million of the 36 million credit cards in the UK are affinity cards. One of the first charities to have its own card was the NSPCC 12 years ago. Normally a charity needs to have a few thousand members or supporters and it will receive a donation when a card is issued and then a small percentage of all

expenditure made with the card.

The royalty for Bank of Scotland cards is #2.50 per card account opened, with another #2.50 each if it is in use after eight months and 20 months, plus 25p for every #100 spent.

There is also the publicity value of having the card shown by holders. Some cards are advertised and sold to non-members or people who are not normally regular supporters of the charity. For the bank the cards are a cost-effective means of recruiting customers.

''It was back in 1987 when we launched the NSPCC which was the first and we did it on our own,'' said Steven. ''In 1989 we decided we wanted to issue affinity cards to acquire customers who lived predominantly in England.

We didn't have to have a branch network to acquire them. We would be able to offer other financial products on the back of the card. We found out that affinity cards in the US were very popular and had been around for about 15 years.

''We found an organisation and we worked with them - Trans National Financial Services. We were out to dominate the card market and we have more than 500 different cards now.''

Since the partnership's first cards were launched in early 1990 more than 700,000 have been issued. But there are some groups the bank will not issue cards for. ''We have turned down a number of organisations. One group is political parties. Another is any group perceived to be doing anything that is anti-social.''

Residents of university towns might think that includes students but the National Union of

Students last year linked up with Barclaycard.

For every card issued to freshers, the NUS receives a cash donation which will provide

it and local student unions with more than #200,000 a year.

The currently controversial deal between Bank of Scotland and right-wing American evangelist Pat Robertson will not be part of this affinity market as that will be a totally separate

operation.

But the NUS deal with Barclaycard helps to demonstrate how competitive the affinity card market has become. Bank of Scotland believes its reputation is an advantage. It has, for example, the only credit card programme endorsed by the Trades Union Congress.

''The agreements we have are that we can use their database for the promotion of the product they are interested in,'' said Steven. ''We do not copy it or keep it for other purposes. That is why many of these groups talk to us. We have, after all, been around for 300 years.''

Although he is a self-confessed Trekkie, Steven does not use a Star Trek card. He has a National Trust for Scotland credit. Though he is based in Dunfermline he lives in Kilmarnock and he and his family are regular visitors to Culzean. The card is a way to support it and other Scottish landmarks.

''Different people take out the cards for

different reasons. People taking it out for a club want to exhibit their membership of the club, or membership of professional bodies, or a

graduate from a university.''

Some cards can offer other effects too. Greenpeace came up with a biodegradable plant-based credit card which does not use any fossil fuels in its manufacture.

CARD FACTS

The world's two leading credit card operators, Visa and Mastercard, have been working since 1993 to ensure card readers will cope with year 2000 problems. The millennium problem came early for them because the expiry dates are usually at least two years ahead.

Visa and Mastercard started issuing cards with year 2000 expiry dates - which would usually appear as ''00'' - in October 1997. Barclaycard, Europe's largest issuer of credit cards with more than nine million cards

in circulation, was the first to start producing 00 cards. In the first four months it received 340 reports of cards being rejected by retailers around the world.

However, that was out of one million ''00'' cards issued and 40% of the reports came in the first month,

showing the problem was tailing off. Abbey National delayed introducing year 2000 cards by reducing the expiry period from two years to 18 months. But by the start of last year NatWest reported that all but 100 of the 170,000 card readers it supplied to business were year 2000 compliant.

Even if terminals fail to read cards with post-2000 expiry dates, the

transactions can still be processed manually.

New cards regularly come on to the market and the deal can vary between cards even from the same issuer. Some of the most uncompetitive

products come from the English High Street banks, perhaps because they have until now had the biggest market share.

But finance houses, newly converted building societies and the Scottish banks have been more innovative. Many cards offer a low interest rate in the first six months of taking the card or on balances transferred from other cards.

Increasing competition should see more competitive rates. The Herald's Money World pages every Saturday list the best offers available.

Gold credit cards are not the status symbol they used to be. When they were first introduced to Britain in the 1970s you had to be in the top 5% of earners, pulling in at least #30,000 a year - six times the average salary - to qualify.

Now you need only #20,000, a far from uncommon income. Only a little more might be enough to get you a platinum card. There is one exception, though: the Signia Mastercard from the Royal bankers, Coutts, requires a minimum annual income of #100,000.

CARD FACTS

Credit has always been a contentious issue. The last duel in Scotland was fought on August 23, 1826 because George Morgan, agent for the Bank of Scotland in Kirkcaldy, publicly questioned the credit-

worthiness of David Langdale, a linen merchant and Bank of

Scotland customer.

Langdale shot Morgan dead.

He was cleared after the bank

secretary gave evidence for him but he still moved his account to another bank. The animosity between the two families was, however, healed enough 13 years later for Morgan's nephew, Alexander, to marry David Langdale's daughter. They founded Langdale, Morgan & Co, which was the start of Kirkcaldy's linoleum industry.

The number of credit card users in the UK has quadrupled to 26 million in the past 20 years holding around 32 million cards between them, with

outstanding consumer credit trebling, while personal disposable income has risen by only 75%.

In the past 10 years spending with credit cards has risen five-fold to more than #32bn a year, and credit card debt in the run-up to Christmas runs at about #18bn, about one-quarter of which falls into the interest-free period allowed by most card issuers.

About #5bn every Christmas is spent with debit cards such as Switch and Visa Delta, which take the money direct from your bank account.

The most effective way to use a credit card is to take advantage of the interest-free period, often up to 56 days, and clear the balance every month because interest rates tend to be high, usually ranging from 17% to 23%. Store charge cards are usually even more expensive with annual interest rates in the 25% to 30% range, although the John Lewis Partnership card is about one-third less.

Pay off everything on the most expensive cards first rather than

paying off a little on each. For if there is an outstanding balance you pay interest on everything from the date

of purchase and you pay interest on the interest until the debt is cleared.

If necessary arrange a direct debit through your bank.

Making cash withdrawals with a credit card is even more expensive, attracting a higher interest charge and also a one-off fee, usually a percentage of the amount withdrawn.