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Tuesday 3 July 2012

How charity credit cards work

By Gwen Douglas


A lot of people are struggling financially at the moment and because of that one of the first expenditures to be cut is people's charity donations. Of course charities still need funding to continue to conduct research and help people and luckily they are still receiving this funding from another source. The charity credit card is a way for people to give money to charity but indirectly. The money doesn't come out of a person's own pocket but they are still able to donate with this method.

The way that charity credit cards work is that people use the card just as they would a normal credit card. That might be to pay for petrol, groceries or a larger purchase such as a holiday or electrical item. Whenever they make a purchase using the charity credit card, a small percentage of the purchase amount is given to charity by the lender. This allows people to still support charities even if they can't afford to use their own money.

Customers can shop around to find the charity credit card offering the best deal but most range between 0.25% and 1% of each transaction. Despite this not seeming like much at all, it obviously adds up very quickly as people use their cards multiple times a week and often for very expensive purchases too.

Charity credit cards have seen millions of pounds donated to major UK charities since they were first introduced a few years back. The Co-operative Bank released their figures which showed more than 6million worth of donations over a four year period. This highlights the scale of the donations considering the Co-operative Bank actually has a relatively small customer base when compared to some larger high street banks which also offer charity credit cards.

Despite charity credit cards being a great idea, they aren't actually the best option. People can donate far more through the use of a cash back credit card. The money paid on cash back credit cards is almost double but using this method, it is up to the consumer to donate the cash back personally once they receive it.




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