Giving back with your credit card
By Marianne Curphey
Despite the economic crisis, we are still a generous nation. In fact, the less we have, the more we seem to give, according to new research by One4all. Even so, household budgets are getting tighter, which has prompted charities to develop innovative ways of receiving donations. This Christmas, you can give to the cause of your choice every time you use your credit card. The sums donated won't make the charities rich, but every little bit helps.
The Co-operative Bank issues the majority of the charity cards available in the UK, which are co-branded with the charity they support. There are fewer charity cards now than before, and the greatest benefit for the charity often happens when you first open an account.
For example, with the Christian Aid credit card, Christian Aid will automatically receive £15 for every successful new account opened and an extra £2.50 if you use your credit card in the first six months. The same terms apply to cards supporting Amnesty International, Greenpeace, WaterAid, Save the Children, Action Aid, RSPB, Friends of the Earth, Shelter, Woodland Trust and Tearfund.
Other banks have charity cards too. The MBNA Breakthrough Breast Cancer card donates up to £40 when you use your card within 90 days of account opening, 25p for every £100 you spend on card purchases, and £2 for every year that you continue to use the card. There is no annual fee with this card.
Financial adviser Yvonne Goodwin points out that the amount you give to charity on these types of cards is small. "It won't make that much of a difference to the charity," she says. "It would be better to donate via gift aid, or via a scheme at your workplace. You can give monthly from your income before tax via the give-as-you-earn scheme. You nominate the charity of your choice and the money is taken by your workplace payroll department before you receive your salary."
If you can't afford to do that, though, or you are looking for a way to donate more, a charity card may be a way to give a little extra whenever you make purchases.
Another option is to take out a top-paying cashback card, and then donate your cash rewards to the charity of your choice. The cashback cards tend to pay higher returns than the charity cards, so if you're disciplined about donating the money, this is the more generous option. Just make sure to pay your balance in full every month and that the annual fee charged does not wipe out the benefits of the rewards you receive.
Published: 25 November 2013
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