Charity & Affinity Credit Cards
What are Charity & Affinity Credit Cards? What are the advantages of a Charity Credit Card? What are the disadvantages of Charity or Affinity credit cards?| What are Charity & Affinity Credit Cards? | Top |
Charity & Affinity Credit Card gives money to your chosen charity when you first sign on the dotted line, after that, every time you use the charity credit card, a percentage of each transaction that you make also goes to the charity. They are advertised as an easy way to donate to your favourite charity by just buying items with your charity credit card, in other words, the more you spend, the more you give.
Remember though, that to be cost effective you must ensure that you pay off the balance of your charity credit card every month, otherwise the amount of interest you have to pay out far exceeds the amount of money that the charity credit card ‘donates’ to your favourite charity.
| What are the advantages of a Charity Card? | Top |
The major advantage of a Charity or Affinity credit card is that it allows the user to make donations to his/her favourite charity, coupled with this, Charity or Affinity credits cards offer a slightly lower interest rate than that of the average credit card interest rate of just over 17% (Credit Action).
The more you use the charity credit card, the more money is donated to your favourite charity, and it is automatic, you don’t have to set anything up. Once you have arranged which charity will benefit from your charity credit card, every time you use it, the charity credit card donates a percentage to that charity. Some cards also offer discounts at partner stores. But as with the others, these benefits are automatically eliminated as soon as you start paying interest on the card.
| What are the disadvantages? | Top |
- High Interest rates
Although they offer slightly lower interest rates than the standard credit card of %17.1 (Credit Action), you can find credit cards that offer a much lower interest rate such as life balance APR credit cards, so if you are one of the 3.4 million credit card holders that regularly only make minimum payments to their credit cards (Credit Action 2007), then you would be better suited to find a credit card that offers a far lower interest rate.
- Low Donations
The amount of money actually paid to your chosen charity is not really that much, donations range from between 0.25% up to 1.25%
- Transfer fees
Whilst nearly all charity credit cards offer 0% balance transfers, most of them charge a transfer fee of either a set fee, or a percentage of the balance of around 3%.
Summing up then, the best bet regarding donating to charity is to set up a direct debit from your account to donate money directly. This guarantees that your payments are made and leaves your conscience free to take the lowest possible APR.
However, providing that you pay off your outstanding balance every month, and you don’t withdraw cash or gamble online with your charity credit card, then if you wish, you can give even more to your favourite charity by using a charity credit card.
