How to Compare Charity Credit Cards
Charity Credit Card
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Charity Credit Card FAQ's
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Charity credit cards offer a great way to donate money to charity. They offer a very easy and simple way to become a regular charity payer - with the exception of not reducing the change in your pocket!
Instead, the credit card issuer pays the named charity a donation every time a cardholder uses the charity credit card.
This guide aims to help you Compare charity credit cards.
Charity credit cards are best for...
- Those with a conscious
Having a good conscious and caring about the good work provided by the charities of this world doesn't always mean you're great at remembering to donate money every month - or even that you have enough spare cash left over at the end of the month to donate to charity.
Charity credit cards can offer a great timesaving and money-saving way to ease your conscious and help you feel good about providing a little extra support to the charity of your choice.
The donations raised by spending on a charity credit card do not cost you anything because it is the credit card company who pays for the donations your spending earns.
- Diligent credit card users
Being a charity lover isn't the only thing that will make a charity credit card well suited to you.
As with any reward credit card, charity credit cards require you to clear your balance in full each month to really benefit from the rewards, or donations, on offer.
It's not a written requirement to always repay your charity credit card spending - but by leaving a balance on your account the charges in interest will far outweigh the amount of donations your spending has earned.
- Spending!
The more you spend on a charity credit card the more funds you will raise for the named charity.
Moving regular spending over to a charity credit card, such as your weekly groceries and petrol, can really help boost the amount of funds you are raising.
Charity credit cards can really provide a great means of support for a charity - just by moving spending you make on your current credit card, debit card, or with cash to the charity credit card.
The secret is to change the way you pay - and not what you're paying for!
However, you can still benefit a charity with a charity credit card even if your credit card spending is fairly low. Charity credit cards will often raise initial donations when an account is opened and also each year you remain a cardholder.
- Average to good credit histories
Charity credit cards are often offered as platinum credit cards, offering a range of additional cardholder services and benefits such as purchase and fraud protection as well as increased purchasing power with higher credit limits.
Platinum credit cards will often require you to have a good credit history and a good income.
The platinum charity credit cards available include the WWF credit card, the Breakthrough Breast Cancer credit card and the National Trust credit card.
The Co-operative Bank think credit card, the Barclaycard Breathe credit card and the Shelter credit card will all also require a fairly good credit rating.
However, if you know yourself to have an average credit rating you can still help your chosen charity, as many charity credit cards are also offered as classic cards with less approval requirements.
The charity credit cards that available as classic cards, include the WWF credit card, RSPCA credit card and the Breakthrough Breast Cancer credit card.
Charity credit cards are not suitable for...
- Leaving balances outstanding
Charity credit cards are not the best credit cards for leaving balances outstanding for the main reason that interest rates could be higher, and you'd probably save a lot more money - that could even be donated to charity - with a low interest rate credit card.
A low interest rate credit card will offer a lower rate of interest for when you don't repay your spending in full at the end of the month. The reduced interest you'll be charged will leave you with more money that could still be donated to the charity of your choice.
- A poor credit history
If you know yourself to have a poor credit history you are unlikely to be accepted for a charity credit card, and being turned down could further damage your credit score.
If you do have a poor credit history and subsequently a bad credit rating, it may be more worthwhile to take out a credit card designed to help people rebuild and strengthen their credit score, for example the Barclaycard Initial credit card, Capital One Classic credit card, the aqua credit card or the Vanquis Visa credit card.
Improving your poor credit rating should be your first priority, and if you're still set on helping to support a charity, you could still set up a direct debit with your favourite charity to send them some money each month.
Knowing what's on offer...
It's a good idea to understand what a financial product is really offering before you sign on the dotted line. This can not only help you when comparing charity credit cards to choose the right card, but can also help you learn how best to make use of the card too.
Charity credit cards are no different, they may donate money to charity, but they are still financial products and should be approached as such.
It's also important to know how the charity donation offer works, for example what spending will raise funds for your chosen charity, so that you can use your charity credit card knowledgeably and increase your funding potential.
- Charity donations
Charity credit cards work like this: a percentage of your credit card spending will be donated by the card issuer to the named charity.
Some charity credit cards may also raise a fixed sum of money to the charity when you open an account, and can also raise a fixed sum each year you remain a cardholder.
- Where does the money come from?
Whenever someone uses a credit card to pay for any purchase, the credit card company charges the retailer or company accepting the payment a fee.
This fee is credit card company profit, and it is this fee that provides the money donated to charity when you use a charity credit card.
So charity credit cards don't cost you as a cardholder anything to raise money for charity.
- What credit card spending earns donations?
Donations are raised when you use a charity credit card to pay for goods or services from retailers or companies. These transactions are called 'purchases'.
Not all credit card usage will raise funds though. The transactions that won't raise money are cash transactions (ATM withdrawals, foreign currency, traveller's cheques, gambling) and balance transfers.
If you need to make a cash transaction, it's always advised to use a debit card if you can - as you'll save money in handling fees and potentially higher rates of interest.
- The credit card stuff...
Charity credit cards are like any other credit card, aside from the charity donations that is. They all have interest charges and all require repayments each month on your outstanding balance.
When choosing a charity credit card you'll obviously want to pick the charity that's closest to your heart. However, it is also important to look at the typical APR, or interest rate quoted.
The typical APR is the interest rate quoted, as the law requires, so you can better compare financial products. It includes the interest rate on purchases and any applicable annual fee.
- Interest rate offers
You may find some charity credit cards offering introductory rates when you first take out the card. These can be 0% or lower rates offered on balance transfers and / or purchases for an introductory period of time.
Balance transfer offers
Because charity donations are not made on balance transfers, if you are looking to transfer a balance you may find a 0% balance transfer credit card or a life of balance transfer credit card more suitable.
It is not because the balance transfer deals offered on charity credit cards are any different, but if you do need to transfer a balance, unless the card also offers the same introductory offer on purchases (same rate, same length), it's best not to use the same card for any purchases. This is because your purchases will accrue interest charges and usually you won't be able to repay them until you have first repaid your balance transfer in full.
Basically, if you use your card wisely and avoid racking up hefty interest charges, transfer a balance and you won't be able to earn any donations until your balance transfer is repaid. You can still make use of a balance transfer deal on a charity credit card, just bare in mind that you should wait until you have repaid your balance transfer before you start using the card for purchases and earning your charity donations.
Alternatively, if you have a balance to transfer, why not take out a second card offering a 0% deal you can hide at the back of the drawer while you enjoy the interest-free breathing space to repay your card debt, whilst keeping on top of new purchases on your charity credit card.
New purchase offers
If you do not need to transfer a balance, by all means go for a charity credit card that offers an introductory rate on purchases, you'll make donations on your spending and you'll also benefit from a 0% or lower interest rate on purchases during the introductory period.
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