UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2007

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE AGE OF 1934

For the transition period from ______ to ______

Commission File No. 333-101918-01

HOUSEHOLD AFFINITY CREDIT CARD MASTER NOTE TRUST I

(Exact name of Issuing Entity as specified in its charter)

HSBC FINANCE CORPORATION

(Exact name of Servicer as specified in its charter)

Delaware
(State or other jurisdiction of incorporation

or organization of the Issuing Entity)

Not Applicable
(I.R.S. Employer Identification Number

of the Issuing Entity)

86-1052062

(I.R.S. Employer Identification Number

of the Servicer)

c/o HSBC Finance Corporation

26525 North Riverwoods Blvd, Mettawa, Illinois 60045

(Address of principal executive offices of Servicer)

(224) 544-2000

(Servicer's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934

during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing

requirements for the past 90 days. Yes o No x

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the

best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to

this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.

See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o..........Accelerated filer o..........Non-accelerated filer x..........Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

The Registrant has no voting or non-voting common equity outstanding and held by non-affiliates as of the date of this Report.

INTRODUCTORY NOTE

Household Affinity Funding Corporation III is the transferor (the "Transferor") under an Amended and Restated Transfer and Servicing Agreement dated as of March 13, 2003 (as amended, the "Agreement"), by and among the Transferor, HSBC Finance Corporation (successor by merger to Household Finance Corporation), as servicer (the "Servicer") and Household Affinity Credit Card Master Note Trust I as issuer (the "Issuer", the "Registrant" or the "Trust"). Under the Agreement, the Transferor sells certain receivables arising in connection with revolving credit accounts to the Issuer which are then pledged by the Issuer as collateral for asset-backed notes issued by series. The series of notes representing the investors' interests in the Trust are registered in the name of Cede and Co., the nominee of The Depository Trust Company (the "Notes") are issued pursuant to the Amended and Restated Master Indenture dated as of March 13, 2003 (the "Master Indenture"), between Wilmington Trust Company, not in its individual capacity but solely as owner trustee (the "Owner Trustee") for the Trust and The Bank of New York, as indenture trustee, paying agent and securities intermediary (the "Indenture Trustee"), as such Master Indenture is supplemented by the applicable indenture supplement relating to a particular series of Notes.

As of December 31, 2007, the following Notes were issued by the Issuer and were outstanding: The Household Affinity Credit Card Master Note Trust I, Series 2003-1 Asset Backed Notes consisting of Class A, Class B and Class C Notes.

As of December 31, 2007, the outstanding principal balance of the Series 2003-1 Notes was $500,000,000. On February 15, 2008 all of the Series 2003-1 Notes were paid in full.

The Servicer has prepared this Form 10-K on behalf of the Registrant in reliance upon various no-action letters issued by the Securities and Exchange Commission (the "Commission") to other trusts substantially similar to the Issuer. Items designated herein as "Not Applicable" have been omitted as a result of this reliance.

PART I

Item 1. Business.

Not Applicable.

Item 1A. Risk Factors.

Not Applicable.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

Not Applicable.

Item 3. Legal Proceedings.

Since June 2005, HSBC Finance Corporation, HSBC North America Holdings Inc., and HSBC Holdings plc, as well as other banks and the Visa and Master Card associations, were named as defendants in four class actions filed in Connecticut and the Eastern District of New York; Photos Etc. Corp. et al. v. Visa U.S.A., Inc., et al. (D. Conn. No. 3:05-CV-01007 (WWE)): National Association of Convenience Stores, et al. v. Visa U.S.A., Inc., et al. (E.D.N.Y. No. 05-CV 4520 (JG)); Jethro Holdings, Inc., et al. v. Visa U.S.A., Inc. et al. (E.D.N.Y. No. 05-CV-4521 (JG)); and American Booksellers Ass’n v. Visa U.S.A., Inc. et al. (E.D.N.Y. No. 05-CV-5391 (JG)). Numerous other complaints containing similar allegations (in which no HSBC entity is named) were filed across the country against Visa, MasterCard and other banks. These actions principally allege that the imposition of a no-surcharge rule by the associations and/or the establishment of the interchange fee charged for credit card transactions causes the merchant discount fee paid by retailers to be set at supracompetitive levels in violation of the Federal antitrust laws. In response to motions of the plaintiffs on October 19, 2005, the Judicial Panel on Multidistrict Litigation (the “MDL Panel”) issued an order consolidating these suits and transferred all of the cases to the Eastern District of New York. The consolidated case is: In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, MDL 1720, E.D.N.Y. A consolidated, amended complaint was filed by the plaintiffs on April 24, 2006. Discovery has begun. At this time, we are unable to quantify the potential impact from this action, if any.

Item 4. Submission of Matters to a Vote of Security Holders.

No vote or consent of the holders of the Notes (the "Noteholders") was solicited for any purpose during the year ended

December 31, 2007.

PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

To the best knowledge of the Servicer, there is no established public trading market for the Notes. Each class of the Issuer's Notes that is publicly offered in the United States is represented by one or more notes registered in the name of Cede & Co. ("Cede"), the nominee of The Depository Trust Company ("DTC").

Item 6. Selected Financial Data.

Not Applicable.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Not Applicable.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Not Applicable.

Item 8. Financial Statements and Supplementary Data.

Not Applicable.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Not Applicable.

Item 9A(T). Controls and Procedures.

Not Applicable.

Item 9B. Other Information.

Not Applicable.

PART III

Item 10. Directors, Executive Officers and Corporate Governace.

Not Applicable.

Item 11. Executive Compensation.

Not Applicable.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Each class of the Issuer's Notes that is publicly offered in the United States is represented by one or more notes registered in the name of Cede, the nominee of DTC, and an investor holding an interest in such classes of notes is not entitled to receive a note representing such interest except in limited circumstances as set forth in the indenture. Accordingly, Cede is the sole holder of record of such notes, which it holds on behalf of brokers, dealers, banks and other direct participants in the DTC system. Such direct participants may hold notes for their own accounts or for the accounts of their customers. The name and address of Cede is Cede & Co., c/o The Depository Trust Company, 55 Water Street, New York, New York 10041. The Servicer is not aware of any Schedules 13D or 13G filed with the Securities and Exchange Commission in respect of the Notes.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Not Applicable.

Item 14. Principal Accounting Fees and Services.

Not Applicable.

PART IV

Item 15. Exhibits, Financial Statement Schedules.

(a)(1) Not Applicable.

(a)(2) Not Applicable.

(a)(3) The Servicer is obligated to prepare an Annual Statement to Noteholders for the year ended December 31, 2007, and Independent Registered Public Accountants are required to prepare an Annual Servicing Report pertaining to the compliance of the Servicer with its servicing obligations pursuant to the Agreement. Copies of said documents are filed as exhibits to this Form 10-K.

(b) The exhibits required by Item 601 of Regulation S-K (Section 229.601):

Exhibit No.

Exhibit Description

Exhibit 31

Certification Pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.

Exhibit 99.1

Annual Servicer's Certificate dated March 3, 2008.

Exhibit 99.2

Independent Registered Public Accountants' Report dated March 3, 2008.

(c) The financial statement schedules required by Regulation S-X (17 CFR 210) which are excluded from the annual report to the shareholders by Rule 14a-3(b):

Not Applicable.


SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Servicer has duly caused this report to be signed on behalf of the Household Affinity Credit Card Master Note Trust I by the undersigned, thereunto duly authorized.

		HSBC FINANCE CORPORATION, as Servicer of and on behalf of the HOUSEHOLD AFFINITY CREDIT CARD MASTER NOTE TRUST I (Registrant)

		By: /s/ Dennis J. Mickey Dennis J. Mickey Senior Vice President, Chief Operating Officer - Treasury

Dated: March 25, 2008



Exhibit Index


Exhibit No.	Exhibit Description

Exhibit 31	Certification Pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.
Exhibit 99.1	Annual Servicer's Certificate dated March 3, 2008.
Exhibit 99.2	Independent Registered Public Accountants' Report dated March 3, 2008.

HOUSEHOLD AFFINITY CREDIT CARD MASTER NOTE TRUST 1 10-K