Credit Cards and Charitable Causes

You may receive an offer to apply for an affinity credit card bearing the name and logo of a particular charity. "Affinity credit cards" get their name from the bond between a charitable advocacy or other nonprofit organization and a credit card company. Sometimes offered exclusively to an organization's donors or members, most of these credit cards are issued by banks and credit card companies under agreements worked out with individual charitable organizations. These cards are similar to other credit cards, but with an extra feature -- the specified charity receives a financial benefit.

Here are some factors to consider when deciding to apply for an affinity credit card that supports a charitable cause:

1. All affinity credit cards are not created equal. Offers vary in terms of how the charity benefits as well as the terms of the credit agreement with consumers. So check carefully!  The charity usually receives a benefit in one or more of the following ways:
   • a certain percentage of each purchase or a specified amount every time the consumer makes a purchase with the card;
   • a certain dollar amount every time a new customer signs up for a card; or
   • a portion of the annual renewal fee for the card.
2. The promotional literature should state exactly how the charity benefits. For example, one affinity card offer declared that a specified national charity would receive half of one percent of all transactions made with the card (that works out to 5 cents for every $10 worth of purchases). If the financial benefit for the charity is not spelled out, ask.
3. Consider the specific terms as you would any credit card offer such as, the amount of the interest rate or finance charges, the amount of the annual fee, if any, late fees and over-the-limit fees, if any, and the length of the "grace period," or amount of time after which finance charges begin to accrue on any unpaid balance.
4. Contributions made by a bank and/or credit card company through the use of an affinity credit card are not deductible to consumers as charitable donations for federal income tax purposes.
5. Remember also to consider your interest in the benefiting charity and not to hesitate to seek out more information on the charity's programs and finances. For additional information on national charities, visit www.give.org .