money to charity can be a great idea and might be top of
mind as the holidays near, but donating with a charity
credit card? No so much, experts say.
not that so-called affinity credit cards are evil.
Charging purchases on a card with an endangered tiger or
a pink breast cancer ribbon on the front might make you
feel good, but just realize that you could do far better
for yourself and your favorite charity.
people read the fine print, they would probably not be
that impressed with it," said Daniel Borochoff,
president of the watchdog group CharityWatch, based in
Chicago. "People should be careful not to feel too
good, because youíre helping in a very minuscule
example, Bank of America offers a charity card with part
of your purchase dollars going to a popular breast
cancer charity, the Susan G. Komen organization. That
sounds great until you realize that the contribution is
only 0.08 percent. So, if you pile up $10,000 in
purchases over a year on that card, the charity gets a
whopping $8, plus $3 when you open the account and $3
for renewing every year.
you instead used a rewards card unaffiliated with a
charity but paying 2 percent cash back, your annual
reward on $10,000 would be $200. Now your credit card
spending alone means you could write a check for 25
times more to the same charity. Bonus: You can report
your charitable donation as a tax deduction because youíre
giving the money, not the bank.
donít like them," credit expert John Ulzheimer
said of charity cards. "There should be a wall
between credit cards and your philanthropic activities.
a credit card should be more about the terms of the card
and not about the design on the card."
took flak recently when it said it would end its
donations to individual K-12 schools, funded by 1
percent from consumersí spending on its REDcard credit
and debit cards. It will instead focus on philanthropic
wellness programs, including those at schools.
outraged card users might have an inflated view of how
much they were helping. Even though Target is a national
megaretailer and donated $432 million to schools since
1997, each school on average received just $370 per
year, the company said.
cards with charitable affiliations have a few upsides.
For consumers, they are easy, automatic and beat
donating nothing at all.
great for people who want to give donations without
thinking about it," said Sean McQuay, credit card
expert at NerdWallet.
clear that giving by individuals is important. Donations
to charities in 2014 totaled $358.38 billion, up 7.1
percent over the previous year and driven most by
donations from individuals, as opposed to corporations,
foundations and bequests, according to an annual report
by Chicago-based Giving USA Foundation. Thatís the
highest total for donations in the history of the
you just know yourself and wonít donate to that
charity otherwise and that charity means a lot to you, I
could see how it could make sense," said Curtis
Arnold of card comparison site CardRatings.com.
pictures on the front of the cards also could have a
certain public relations component ó perhaps the
cashier asks about it or a friend sees you hand it to a
waiter and those people eventually become involved with
might have an opportunity to share about a charity thatís
near and dear to your heart. So itís almost a way to
spread the word about your charity," said Bill
Hardekopf, founder of credit card comparison site
Lowcards.com. "There are some PR benefits."
Susan G. Komen organization is comfortable with its
arrangement with Bank of America and its affinity card,
a spokeswoman said.
cards are free to the consumer, and give them an
opportunity to show their support for the breast cancer
movement and generate a donation to Komen at no cost to
them," Komen spokeswoman Andrea Rader said.
donations of 0.08 percent add up, generating more than
$6 million since 2009 for investment in research and
community outreach, she said.
think itís a win-win on many fronts ó in terms of
the dollars raised for our mission programs by (Bank of
Americaís) customers, involvement of bank executives
and employees, and support for our races and walks,
as a smart consumer and individual philanthropist, you
could do better, experts said.
first thing to know is the cardinal rule of rewards
cards: Theyíre good for only one type of consumer, the
one who pays off the balance in full every month.
Otherwise, finance charges will easily surpass the value
of any rewards you earn and donations you give. If you
carry a balance, forget a rewards card and get a card
with the lowest interest rate you can find, experts say.
rates on charity cards tend to be worse than average,
some exceeding 20 percent for those with poor credit.
know what youíre really getting when you sign up.
of Americaís Nature Conservancy card is even less
lucrative for purchases than the Susan G. Komen one,
giving 0.05 percent, or $5 per $10,000 in spending ó
although it promises to contribute $100 for opening an
account if the card is used once and remains open for 90
days. The World Wildlife Fund card by the same bank
gives 0.25 percent of purchases and $5 for opening and
renewing an account.
are a lot of things to look into with these cards, most
importantly how that card benefits the charity, because
thatís what itís all about, ultimately, if youíre
getting one of these cards," said Matt Schulz,
CreditCards.comís senior industry analyst. "You
donít want to get blinded by the logo on the card. You
want to make sure you do the math."
as with all credit cards, itís about the fine print,
which includes details about the interest rate, annual
fee and charity rewards. "With any card, especially
a rewards card, you need to dive into the terms and
conditions," Hardekopf said.
is also a danger, as consumers rationalize unnecessary
or unaffordable purchases because some part of the
charge is going to charity.
on a charity is really no different than overspending on
a vacation," Ulzheimer said. "Itís still
downside is more subtle.
a check to a charity ó or actively donating on its
website ó can provide a psychological boost, as
opposed to the invisible giving that happens through
automatic credit card donations.
is a degree of separation that takes away from the
charitable aspect of it," Ulzheimer said. "I
would rather have the direct interaction, rather than
letting my bank have the direct interaction."
number of charity cards offered seems to be dwindling,
industry watchers said.
Discover earlier this year discontinued its affinity
program with 14 organizations, including the Humane
Society of the United States. It gave the vague reason
"to better align resources with the companyís
strategic initiatives" and said the programs
represented a "very small" portion of its
credit card-issuing community is always looking for a
hook for what is largely an abysmal response rate to
those mailed credit card offers. And this is one of the
methods they like to try, which is to team up with
reputable and well-meaning charities and offer these
affinity cards," Ulzheimer said.
think the market has spoken."
WAYS TO GIVE
cards and charity can mix in ways that make sense,
you donít have a cash-back card, you can donate
accumulated reward points or frequent-flier miles to
charities. Some credit cards make it easy.
point to programs like Capital Oneís, in which it
partners with charity experts Network For Good and
GuideStar to provide a "No hassles giving" Web
portal for donating to 1.2 million charities. It
promises 100 percent of the donation goes to the
selected charity. Capital One covers transaction fees
associated with credit card donations, it says. It even
provides an emailed receipt to be used for tax purposes,
so donors can claim a charitable deduction on income
American Express has Members Give, and DiscoverCard has
Discover Giving. Citi ThankYou Rewards can be redeemed