Is It Good For The Charity

Category: Finance, Credit.

Not long ago, Robin Amlot posted a bit of a rant about the charity credit card craze at MSN Money. If your intent is to donate to a charity, your favourite charity will certainly get far more from your gift if you make the donation directly.

The rant was on target, as far as it went. Under various charity schemes, your donated loot will actually be worth more to the charity than the amount that you contributed. The point is that this is money you ve spent anyway. But that rant rather misses the point of using a charity credit card, doesn t it? When you charge your purchases on a charity card, you re not paying more or less for your purchases- but a part of that cost goes from your pocket into the coffers of your favorite charity. But if you want to donate the money to charity, why not just, the article charges make a donation of �1150- which, under the right scheme, will actually be worth almost �200 to the charity- and, the writer adds triumphantly, you didn t have to spend any other money to do it!

Amlot s article takes the position that if you charge �10, 000 on the AMEX Red Card- the particular target of the rant- you generate �1150 in donations to charity. Which is, in the real world, a backwards way of looking at things. Chances are, you won t. Let s start with the assumption that you ll charge �10, 000 on your card. Most people don t. At the rate of one pence per pound spent, the rate that the AMEX charity credit card uses, they ll contribute �4 per month to charity- but you re not spending an extra �4 per month.

But what happens if you charge, �400 in groceries, say every month on your card- and pay it off each month in one chunk. You re just buying your groceries at the price you d have paid anyway. Most people wouldn t- it s such a small amount. And be truthful with yourself- would you think to donate that �4 each and every month? Who could be blamed for wondering what good it would do? Even more importantly, multiply that 4 by another 5, 000 people doing the same thing and the numbers start to add up.

But that four quid a month is nearly �50 per year. Is there profit in it for the credit card company? They count on people s desire to do good to increase their own market share, and increasing that market share means that they make more money even when giving part of it away. Of course there is. Is it good for you? While you re at it, compare credit cards to find yourself the best rates and see if you could make those contributions suggested by Amlot with your savings, if any at all. Take the time to compare all the options with the way you shop now and see if it will cost you more to charge your regular purchases.

Is it good for the charity? Those four quid and 20 pence here and there add up- to the tune of �380, 000 from Barclaycard in 200 In short, when you compare and choose a charity credit card, you are using your choice to direct donations to one of hundreds of charities in need- donations that most people would consider too insignificant to bother with. Despite the attempt to make it seem that donating via a charity option takes money out of the pockets of those you want to help, the truth is that the charities that benefit get thousands in donations that no one would have thought to make in another way. How could that be bad? If you re in the market to apply for a credit card, you can compare credit cards and all charity offers at good comparison websites, where you ll find the best deals listed and easy applications for dozens of the best credit card offers in the UK.

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