Credit Cards UK

Time To Lose Your Affinity Credit Cards

 

August 24, 2005

If you have or are thinking of getting a credit card, that makes donations to charities, then think again, by either getting rid of the Affinity credit card or by not taking it out in the first place.

You see I’m not being a scrooge or being a charity begins at home sort of person, it’s just that if you take a credit card on that gives you cash back on your expenditure, then you will make more money for the charity of your choice this way, than you will with a Affinity credit card.

Let’s go into the details, if you take out the Affinity card then you may have been promised a one off payment to the charity that is attached to the credit card that you have taken out, this could be anything from £2.50 to £18, great start to the charity before you even spend a penny of your own cash, but what they don’t tell you is that this payment may hit your credit score and after that the charity will receive 0.25% of the value of any purchases that you make on the credit card and if your charity is lucky they may receive a little more, maybe 0.5% if you have a Comic Relief for example.

Another little detail that you may not know about the Affinity credit card, is that they are also subject to tax as they are regarded as a royalty payment from the bank and not a donation, so the charity will not be able to claim the tax back, as the payment was not made by an individual.

So now to the cash back credit cards and how that they will make more money for your charity than the Affinity credit cards, first off a cash back card will give you up to 2% back as soon as you use it for a purchase, that’s 8 times more than most Affinity cards give to the charities, so it is really quite a simple concept, take a cash back credit card, build up the cash that the credit card is giving you back for using it on purchases and you could be giving your charity 800% more than a standard Affinity credit card, with another positive being that the charity will be able to receive the tax break too.

But there is a word of warning regarding both the Affinity and cash back credit cards, if you don’t or cant pay off the account in full at the end of each month, then it would be advisable not to buy into any of these cards, as they will usually carry a higher APR than most standard credit cards, so taking a credit card with a lower APR (10% or lower) is a better option for you and if you wish to give to charity, you can do with the cash that you will save from giving to the higher APR credit cards.

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