CHAMPAIGN – The University of Illinois Employees Credit Union has snagged the potential to get thousands of new credit-card customers, thanks to a deal with the UI Alumni Association.

The alumni association, which offers an "affinity" credit card to its members, has awarded the contract for handling that business to the credit union, after 19 years of doing business with MBNA and its acquirer, Bank of America.

Attention to marketing was the primary reason for changing, said Joe Rank, vice president of the alumni association.

"The credit union can do a lot more targeted marketing. They know their customers, they know our alumni," he said.

The deal came as the culmination of a six-month process. The alumni association put together a request for proposals, and five banks and the UI Employees Credit Union responded.

"The financial plans were fairly comparable," Rank said. But the big banks emphasized mass marketing with only "a little bit of personalization."

The credit union will offer five credit-card designs for alumni association members. One features the Alma Mater statue, another depicts UI football great Harold "Red" Grange and a third features the Block "I" logo. The other designs highlight the UI's Chicago and Springfield campuses.

Customers who currently hold an alumni association credit card can use it until it expires. Or, if they want the new VISA card offered through the credit union, they can apply for the card by calling 1-877-678-4328 or going online.

For the first 12 billing cycles, the UI card will offer an introductory annual percentage rate of 3.9 percent to 12.9 percent, depending on the card holder's creditworthiness. After the first year, the rates will range from 10.9 percent to 17.9 percent, again depending on creditworthiness.

Card holders can opt to take part in a "rewards" program. Those who opt for the rewards program – which offers points toward air travel or merchandise – add an extra 2 percentage points to their rate. Those eligible for the 10.9 percent rate, for example, would pay 12.9 percent.

The card has no annual fee, and there's no fee for transferring balances from an old card to the new card, said Greg Anderson, executive vice president for the Champaign-based credit union. There's no cash-advance fee either.

The alumni association has 625,000 members. Rank would not disclose how many of those hold alumni association "affinity" cards, citing a confidentiality agreement with Bank of America.

The UI Employees Credit Union already has a credit-card program for its members, and Anderson said the new program should swell its ranks.

"We've got about 6,000 to 7,000 card holders among our 37,000 members, and I see that doubling in five years," he said.

To help with the rollout of the new card, the credit union recently hired Susan Toalson – former executive director of the Urbana Business Association – as director of affinity services.

The alumni association said a portion of each purchase made with the credit card will support alumni association programs. But neither Rank nor Anderson would disclose that percentage.

"That's a confidential term," Rank said. "It's a relatively small percentage – less than what merchants pay. We've never disclosed the exact percentage."

Rank said royalties from affinity programs – including not only credit card but also insurance and travel programs – make up "probably 20 percent" of the alumni association's overall budget.

The remainder comes from membership gifts, endowments, the life member fund and university support, he said.

Although the UI Employees Credit Union has marketed itself mainly to Champaign County residents, University of Illinois alumni have been included in the credit union's field of membership since 1997, Anderson said. Alumni need not live in Champaign County to be members.

Rank said alumni association members are an attractive target for financial institutions.

"College graduates tend to be better credit risks than the population at large," he said. "They are less risky, and delinquency rates are lower. They tend to pay on time."

UI Employees Credit Union members who aren't UI alumni can get alumni association cards, Anderson said. The chief difference between the credit union's traditional cards and the new cards is that the traditional cards had no "rewards" program associated with them.

Rank said the agreement with the credit union took effect July 1, but the association waited until Monday – when Web sites accommodating online application were ready to go – to announce the program. Until then, uses of the new cards had been limited to a small group of people.