You can support the charity or cause of your choice by applying for a socially responsible credit card – but first consider all the pros and cons. Here’s what you need to know.
American Express’s venerable Green Card now lives up to its name.
Both the American Express® Green Card and the American Express Corporate Green Card are made primarily from plastic reclaimed from beaches, islands and coastal communities, according to American Express.
The change is part of a partnership with Parley for the Oceans, a nonprofit dedicated to protecting marine life and keeping the globe’s oceans clean.
But if you want a socially conscious credit card in your wallet, you don’t have to rely solely on the Amex Green Card. Socially conscious credit cards, those connected to environmentally friendly or charitable organizations, have long been offered by banks.
These cards donate a percentage of your purchases – and sometimes a flat fee when you start a new account – to affiliated charities and nonprofit organizations. Every time you use one of these cards you’ll be sending at least a bit of money to a charitable organization of your choice.
The challenge? Some of these credit cards offer little in the way of rewards, so if you’re interested in earning those, charitable cards might not be the best choice. Some card providers are also fuzzy about how much of your purchases are donated.
And personal finance pros worry, too, that taking out a credit card just to support a charity might not be a sound financial decision.
“It’s a nice idea, but for someone who has gotten themselves in trouble before by using credit cards, it’s not worth the risk,” said Allison Bishop, a financial coach based in Portland, Maine. “It’s so much safer to donate cash, collect needed supplies or volunteer your time.”
See related: Best rewards credit cards
8 options to make a positive social impact with credit cards
American Express Green Card
In addition to printing its Green card from recycled plastic, Amex is launching its first credit card recycling program in 2020. According to American Express, cardholders can send their expired or nonworking cards to the issuer to make sure they are properly recycled.
But aside from its environmental benefits, is the Green Card a good choice?
American Express recently revamped this card to make it more attractive to users who might be tempted by competitors’ cards that offer their own robust rewards programs. The relaunched Green Card comes with:
- 3 points per dollar on travel and at restaurants across the globe
- Up to $100 CLEAR Credit per year that can help users get through security faster at airports and stadiums across the country
- Up to $100 LoungeBuddy credit per calendar year
- 30,000 points if you spend $2,000 in first three months
- $150 annual fee
Affinity cards for charities
If you feel the Green Card is not for you, here’s some good news: You don’t have to rely solely on credit cards made from recycled plastic to make a positive social impact. You can also turn to affinity credit card programs tied to charities.
In these programs, charities partner with banks to offer branded credit cards. Every time you make a purchase with one of these cards, a percentage of the money you spend is donated to the charity or nonprofit affiliated with the card program.
See related: Best charity credit cards
Green America Rewards Platinum Visa
Todd Larsen, executive co-director at Washington, D.C.-based Green America, an environmental nonprofit, said socially conscious credit cards can provide a financial boost to organizations like his.
Larsen points to the Green America Rewards Platinum Visa Credit Card. He said the Visa card program generates about $40,000 a year for Green America.
“It does make an impact,” Larsen said. “For many people, it’s an easy way to sort of automate a donation to our organization.”
The card has a rewards program, but it’s fairly basic, providing one point for every dollar that cardholders charge. It has no annual fee and offers an introductory APR on purchases and balance transfers of $0 for the first 12 months after you open an account.
See related: How to donate unused rewards miles and points
Rotary Signature Visa
The Rotary Signature Visa credit card is another example of a credit card tied to a charity, in this case Evanston, Illinois-based Rotary International, a group whose mission is to “provide service to others, promote integrity and advance world understanding, goodwill and peace.”
One of the organization’s main focuses is polio eradication.
The credit card has played a role in these efforts, said Eric Schmelling, chief philanthropy officer at Rotary.
Schmelling said the card program has generated about $3.4 million in revenue since its launch about 15 years ago. Rotary International sees about $225,000 of revenue a year from the program. About 10,000 consumers use the card, Schmelling said.
The Rotary Signature Visa card offers:
- 3% cash back in one of six categories, including gas, online shopping, dining, travel, drugstores or home-improvement retailers
- 2% cash back at grocery stores and wholesale clubs on the first $2,500 in combined purchases
- 1% cash back on all other purchases
- $200 cash rewards bonus after spending $1,000 in purchases during the first 90 days
Schmelling said the card program has been successful largely because Rotary members can see their contributions paying off.
Incidents of polio have declined by 99.9% since Rotary began focusing on this cause about three decades ago, Schmelling said. The organization has also helped to immunize 2.5 billion children across the globe.
“People want to know where the money is going when participating in one of these programs,” Schmelling said. “Our membership feels strongly about polio eradication, and they see the results.”
Charity Charge World Mastercard
What are some of the other credit cards you can apply for if you want to support a charity or nonprofit?
The no-annual-fee Charity Charge World Mastercard allows you to:
- Donate 1% cash back with every purchase to nonprofits, K-12 schools, colleges and religious organizations of your choice
- Support up to three causes at a time and change these causes whenever you like
Susan G. Komen Cash Rewards Visa*
This card, issued by Bank of America, supports the organization dedicated to fighting breast cancer, with Bank of America saying that Susan G. Komen has received more than $10.3 million from the card program since 2009.
With each new card that remains active for the first 90 days after opening, Komen receives $3 and 0.08% of all retail purchases made with the card. Komen also receives $3 for each renewal.
The card comes with:
- 3% cash back in the category of your choice, including gas, online shopping, dining, travel, drugstores and home improvement/furnishing
- 2% cash back at grocery stores and wholesale clubs
- You’ll earn 3% and 2% cash back on the first $2,500 in combined choice category, grocery store and wholesale club purchases each quarter
- 1% cash back on all other purchases.
- No annual fee
Bank of America also offers the World Wildlife Fund Credit Card*, which offers the same cash back benefits and donation model as its Susan G. Komen card.
See related: 5 ways to maximize gifting for good
Consider rewards when choosing an affinity card
It’s important to look carefully at each affiliated credit card to determine exactly how much of your credit card purchases will go toward a charity or nonprofit. Some of the socially conscious cards available do not release that information.
Larsen said Green America is not allowed to release the exact percentage of purchases that is donated from its Visa card. But even a small percentage can make a significant difference.
“Lots of purchases add up over time to a significant contribution,” Larsen said.
Some of the cards might not be all that valuable, either, when it comes to rewards or cash back bonuses.
If you are looking for a credit card with a more robust rewards program, you might consider opening one that provides more points for select purchases. You can then donate to charities or nonprofits in another way.
The Green America Visa card or other affinity cards, though, might still be a good choice if you’re looking for an easy way to donate to an organization and making those donations is more important than maximizing your rewards points.
Possible financial drawbacks of donating through credit cards
There are possible financial pitfalls, too, when relying on a credit card for charitable donations.
Even if card providers are clear about the numbers, your donations might not add up to much. Financial coach Bishop said that even if a charity receives 2% of your card purchases, that would still result in a donation of just $10 for every $500 you charge with your card.
Larry Duffany, a financial coach in Thomaston, Connecticut, and the founder of Raising Hope Financial Coach, said the high interest rates associated with affinity credit cards can get consumers into financial trouble.
This is especially true with cardholders who have a habit of not paying their card balances off in full each month. These consumers run the risk of doing the same with charity-affiliated cards and could find their high-interest-rate debt growing even more each month, Duffany said.
“People who got into debt trouble to begin with have a problem with their behavior with money,” Duffany said. “By offering a ‘charitable contribution’ option on the debt, providers make the debt sound appealing. People who have an affinity for using debt as a tool will be tempted by this kind of offer and will fall prey to this marketing ploy if they are not careful.”
*The information for the Susan G. Komen Cash Rewards Visa and World Wildlife Fund Credit Card has been collected independently by CreditCards.com. The card details on this page have not been reviewed or provided by the card issuer.