MLS credit cards offer plenty of risks and rewards

Major League Soccer is the next professional sports league to come out with its own credit card, fittingly called the MLS Forward Credit Card. Akin to other credit cards, use of this card provides benefits that can benefit MLS fans.

Whereas an airline credit card, for example, can provide discounted flights, this MLS card can provide discounts on tickets, merchandise and more. Additionally, supporters can show off the card of their favorite club, with 23 different card designs and 21 MLS clubs available as options.

The MLS card deal is with Avant, one of the fastest growing credit card issuers in the United States. Granted, the company is still far behind mega banks such as Chase, Citi or Capital One. However, this deal could help the already-impressive growth of the company.

The one catch is that this credit card has an annual percentage rate, or APR, of 29.99%. This interest rate is high, especially compared to the average new card APR of 23.65%. In that case, it appears MLS or Avant is attempting to take advantage of a growing audience.

However, this may not necessarily be the case. For instance, one financial expert says it simply caters to a younger audience that provides strong benefits based on the potential market for card holders.

Explaining MLS and Avant’s APR

Matt Schulz is the Chief Credit Analyst at LendingTree. He says Avant is a credit card issuer that tends to direct its product towards a younger audience. Generally speaking, these are people with lower credit scores that are trying to build credit. The company’s principal product, the Avant card, has relatively low fees but high APRs. For card users, if they pay their statements in a timely fashion, it quickly builds credit.

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“That’s obviously easier said than done, especially when the cost of everything seems to be rising by the day, but it is possible, and it should be the goal for anyone using a credit card,” Schulz said. “Otherwise, that Sebastian Driussi jersey you just bought can end up costing a whole lot more than you’d expect.”

Schulz is a day one season ticket holder of Austin FC. He says APRs of 29.99% like the MLS Forward credit card are high, but not necessarily uncommon. He referenced cards from Macy’s or Dick’s Sporting Goods that regularly exceed 30% in APRs.

Moreover, MLS is not the first sports league, or even team, to release a credit card. On each occasion, APRs tend to be high. The NHL and NFL both have their own credit cards. The NFL’s has a comparable APR to MLS between 20 and 30%. The NHL’s has slightly better interest rates, between 16 and 27%. Credit cards from Liverpool and Manchester United from card distributor Cardless. Like MLS, those APRs are between 20 and 30%.

“The truth is that APRs for virtually all credit cards today are as high as they’ve been in decades, maybe ever,” Schulz said. “While the rate on the MLS card is high and cardholders should do everything in their power to avoid carrying a balance on the card if they get one, the rate is not particularly unusual for a card of this type.”

The draw of the MLS Credit Card

Similar new credit cards have comparable APRs. Therefore, the benefits of the MLS Credit Card can suit MLS fans. The league’s generally younger audience can take advantage of what Schulz describes as “fairly strong” rewards.

The card’s points system can go towards MLS tickets, MLSstore.com gift cards and simple cash back. Users can accrue points in various ways. They get five-times back on MLSstore.com purchases, three-times back on gas and two-times back on restaurants and groceries.

“[The rewards system] makes it a card that a hardcore MLS fan can get a pretty good return on,” Schulz said.

“Generally speaking, younger people are less likely to have great credit, meaning that the typical person that this card would be marketed to may be a little riskier to lend to than the average American. I suspect that is partly why the card has as high an APR as it does.”

The true value of the MLS credit card comes down to effectively paying statements before the interest rates kick in.

“However, because the interest rate is so high, it is really important that people not carry a balance month to month on the card,” Schulz cautions. “That’s because the amount of interest you’ll pay on the card will easily outweigh any rewards you might earn. If you do tend to carry a balance, you may be better off looking elsewhere for a card with a lower interest rate.”