A good cause credit cards have become increasingly popular over recent years, as people keep pace with support their favourite charities at seemingly no excess cost to themselves. When you take out one of these cards, a new one-off donation of a few dollars is made by the card company to the African Charity linked to the card, followed up by a small number of everything you spend, again donated by the card company as opposed to the cardholder.
Cards are available covering a huge range of charitable organisations, by local to national and even international, and there is almost a number of to be one that supports an area of concern to you.
All this will sound like a good deal for everyone involved, but is the picture as simple seeing that that? The first drawback to a charity card is that the car loans interest rates, balance transfer offers, and other deals are rarely as large to the cardholder as those featured by other memory cards that compete under being a ‘best buy’ card. This could be a price you feel worth paying for the benefit the charity should be sent, but you might in fact be better getting a cheaper card in addition to donating the money you save to your charity directly.
Even positioning aside the issue of higher interest charges, charity cards include another drawback – the percentage of what you spend that is definitely donated is usually tiny, with 0. 25% being a regular figure. Compare this to a typical cashback card which could pay between 1% and 2% of your spending, and it’s easy to see that the card issuer may not be acting as generously simply because it appears. Again, by donating your saved up cashback on to your chosen charity you might have a larger impact.
The other point to but the truth is is that the money charities get from the credit card companies isn’t classified as tax-free, unlike direct donations, making it even significantly less valuable.
So are charity cards a waste of time? In terms of precise sums donated they might seem so , but there are rewards to the charity concerned above and beyond the simple percentage donations. Initially, by using your card you’re helping to publicise the charity you’re interested in, just by the simple act of handing it over to help counter assistants, waiters and the like, who will notice an unusual playing card, as will your friends and colleagues.
Secondly, the charitable organisation is guaranteed that the donations will be made, however modest. If you save up your cashback with the intention of giving it, there’s always the chance that when you actually get the money possibly you have another pressing use for it, and the charity misses available.
Lastly, and perhaps most importantly, the huge marketing muscle and promoting resources of the card issuer are put towards publicising the card and the charity, at least to some extent. This means that more people definitely will end up donating in total, even if the individual figures are small, and the charity gets more exposure in general