How to Use a Charity Credit Card
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Charity Credit Card FAQ's
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Charity credit cards are a great choice of credit card for anyone who wants the ease and simplicity of earning automatic charity donations and who regularly keeps abreast of their credit card spending.
Charity credit cards allow you to earn money that is donated to a named charity on all your card spending. The donations are funded by the issuing bank or building society.
The more you spend on a charity credit card the more donations you'll be earning for charity. However, there are a few other important factors to bear in mind when using a charity credit card - firstly for increasing your potential to earn donations, and secondly to make sure the bank is not recouping the costs from your own pocket!
Make the most of your charity credit card...
- Make sure the bank is paying and not you!
The first and somewhat most important way to make the most of a charity credit card is to make sure that the bank is coughing up the cash for your chosen charity and not you.
While you may not be so frugal that would you begrudge giving a charity a few of your own pounds, no one enjoys making a rich company even richer.
By not repaying your charity credit card spending in full - you are no longer earning charity donations for free - instead your interest payments are now lining the pockets of the issuing bank, and the charges for carrying a balance will be far greater than the money the bank will be paying out in donations.
Spend freely on a charity credit card, but only spend what you can afford to and remember to budget your income so that you can pay back your spending in full each month.
Clearing a charity credit card balance in full will mean you'll avoid any interest charges on your purchases - as all credit cards offer an interest free period between statements if you pay your balance in full.
You'll then be earning donations for your chosen charity without it costing you a penny - directly or indirectly!
- Maximise your donations
Once you've got your head around using your charity credit card like a charge card - repaying in full, you can begin to increase your credit card spending and really maximise on your charity donations.
By far the best way to maximise the charity donations you are earning is to use your charity credit card whenever you would normally be using your debit card.
Move everyday spending over to your charity credit card. Expenses such as grocery shopping and petrol are usually the things we spend most of our money on - and are also the things we need to buy anyway.
If your service provider allows you to, you can move bill payments to your charity credit card, so you'll be earning charity donations on your household bills too.
- Spread the potential
Although it may not be suitable for everyone, one way to increase the charity donations you are earning is to get an additional card for your partner or family member.
Most charity credit cards will offer additional cards for free and they work like a second card to the same account.
It's important that you only give an additional card to someone you trust though, as you'll still be responsible for repaying their spending.
Things to watch out for...
- Repaying your charity credit card statements
As mentioned above, it's important to try and repay your charity credit card spending in full each month. Not only will it keep you out of debt but it will also keep your charity donations.
Setting up a direct debit or using Internet banking can help you keep abreast of your spending and required payments.
Another very good reason that it's important to keep on top of all your charity credit card spending is that if you fail to make a payment or your exceed your credit limit the card issuer usually reserves the right to void any charity donations you've earned.
If you really don't think you'll be able to keep your spending under control enough to benefit from a charity credit card, you may want to consider taking out a low interest rate credit card instead. You'll save a lot more money in interest charges - which you can still donate to charity if you want to.
- Transferring a balance
Some charity credit cards do offer very good balance transfer deals, and if you are looking to transfer a balance, there is no reason why you shouldn't transfer it to a charity credit card.
However, there are a few points you should be aware of to keep your money in your own pocket and not in your bank's!
Firstly, you can't earn charity donations on balance transfers.
Secondly, and more importantly, if you do transfer a balance to a charity credit card, unless the card also offers the same introductory deal on purchases (same rate, same length), you should wait until your balance transfer is repaid before you start using the charity credit card for purchases and earning donations for your charity.
To briefly explain why, although you can find out more detailed information in this article on balance transfer promotions, if purchases are not included in the introductory deal, or the introductory length is much shorter than the balance transfer deal, your purchases will be charged interest and because of the way credit cards allocate payments made to your account, you won't be able to repay your purchases until you have first repaid your balance transfer. In effect, leaving your purchases to accrue hefty interest charges whilst you are still repaying your 0% balance transfer.
Don't let this put you off; just make sure to remember not to use the credit card you have a balance transfer deal on for purchases until you have repaid your balance transfer.
The other, and somewhat better option, is to actually get a 0% balance transfer credit card for your current card debt and then get a charity credit card for new purchases and to earn charity donations.
- Cash withdrawals and foreign currency purchase
Charity donations will never be awarded on cash transactions. However, there is another reason to avoid using your charity credit card for accessing cash.
Cash transactions are more often than not subject to higher interest charges and handling fees. Because of this, we always advise using a debit card for cash transactions, or if you have to a low cash rate credit card.
Remember that cash transactions don't just cover ATM withdrawals, they also include getting 'cash back' at the supermarket, buying foreign currency or traveller's cheques and also gambling transactions, including any transaction made at a casino - gambling establishment - such as buying food or drink.
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