Give more with less through charity credit cards

By Jennifer Maciejewski

Sign up to give
With a few clicks, you can set up your cause card to give even more to your preferred charity. Register your cause card, as well as grocery loyalty and debit cards, for the eScrip program. EScrip works like UPromise, with participating merchants donating a percentage of each sale, but the contributions go to the charity of your choice instead of a scholarship fund. Install the OneCause toolbar. With the toolbar in place, your designated cause receives a percentage of qualifying online purchases, even if you forget to click through to the merchant from the OneCause shopping site. Though programs like eScrip and OneCause won't generate enough revenue to replace regular giving, every penny counts.

Faced with ever-increasing food and health care costs and shrinking 401(k)s, 57 percent of Americans now feel that their incomes are falling behind the rising cost of living, according to an October Pew Research Center survey. If you're trimming tips or skipping your charity's annual black-tie fundraiser to make ends meet this season, you can still give a little without affecting your budget by using charity credit cards.

Show your support
With affinity credit cards, you can show your love for virtually anything: Mickey Mouse, NFL teams, and even your favorite charity. "This is the time when, if all else is equal, you should carry a card that helps a nonprofit organization," says Laura Scher, chairwoman and CEO of Working Assets. "It's an added bonus."

Cause credit cards automatically donate a portion of each transaction to the charity linked to the card. Some are branded with the organization, like Bank of America's American Heart Association and Chase's World Wildlife Fund cards; others allow you to steer the donation to the cause of your choice. You can support your child's public school through Target's REDcard Take Charge of Education program or split the money between up to five Israel-related charities through the HAS Advantage Visa Platinum card.

While each contribution is small, often ranging from 0.3 percent to 1 percent of each transaction, those little bits add up when multiplied out over many cardholders. To give a bit more, look for a cause card that offers an initial donation of $10 to $50 when each card is activated, such as those from Chase, OneCause, and CardPartner.

"Every 250 dedicated, engaged users can drive approximately $48,000 a year -- about $190 a person," says Stephen Avalone, president of CauseLoyalty, which offers the OneCause Visa Platinum card. "We have yet to see a substantial organization reach all of their funding goals using the program, but it can earn the dollars to make a meaningful difference."

For instance, one small private school with 89 families raises $6,000 each quarter with its strategic use of OneCause's credit card, tool bar feature and shopping site, raising money the school uses to fund a scholarship program and offset sports costs.

Don't use a credit card? A few banks, including Capital One, Bank of America and U.S. Bank, offer programs that link check and debit cards to charity, though those contributions are much smaller, typically about 0.2 percent of signature-based (nonPIN) transactions.

Maximize the contribution
"The money that goes to the charity is fairly small, so you might lull yourself into thinking that you're doing more for something that you care about than you are," says Ann C. Logue, author of a book on socially responsible investing. "The other issue is, of course, that the credit card company gets the tax deduction, not you," says Logue.

To give even more, opt for a rewards credit card that offers a higher cash-back bonus, such as the American Express Blue Cash and Discover More cards, and then donate the cash-back check to charity. Not only will the charity receive a larger donation than they would through most cause cards, but the tax deduction belongs to you, not the credit card company, and you see the value of each check.

Don't trust yourself to follow through with donating your cash-back check? Stick with points and redeem them for a contribution to charity, or maximize your contribution by switching between two cause cards to get the best rate. Working Assets sets aside $0.10 per transaction, regardless of the amount, to a pool of money that's split among 50 nonprofit organizations each year. Using the card for small purchases under $10 makes each dime worth 1 percent or more. Save the big-ticket items for cause cards that offer a higher rate.

"Don't get lulled into overspending just because of the donation," Logue says, and don't carry a balance. For most cause cards, the transactions, not the interest, generate the rewards. "View the affinity card as a nice extra."

See related: Gifts that give twice, Charitable gift cards, Green credit cards that reward the environment, It is getting easier to be green with credit cards, 10 ways to go green with credit cards

Published: December 16, 2008

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