At first glance charity credit cards can seem like a simple, low-effort way to regularly donate to charity, but this guide will show you how you can give ten times more to charity simply by switching to a better credit card.
There are over 30 charity credit cards on the market supporting everything from polar bears to humanitarian aid. These cards donate to charity in several ways:
On the face of it a lump sum gift to a charity followed by regular donations each month makes charity credit cards seem attractive. But dig a little deeper and you’ll find the truth is a lot less appealing. Charity credit cards come with several hazardous downsides:
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Getting your free credit score will not damage your credit rating.
A credit card can still be a great way to donate to charity, as long as you use the right card. Forget about charity credit cards, instead get a cashback credit card.
Your charity will receive 10 times more if you use a cashback credit card
These cards pay you back every time you spend money. They normally have an introductory period where you earn up to 5% cashback on your shopping and then, after three months, it drops to 1% – 2%. Your cashback will be paid to you once a year. So, if you are charitable and donate that money the charity will receive 10 times more than it would if you had used a charity credit card.
For example, if you spend £1,000 a month on a credit card you would donate £30 a year with a typical charity credit card. If you use a cashback card the charity would get almost £300.
Use our personalised credit card comparison tool to find the cashback card that best suits your spending habits, so you can maximise your charitable donations.
Don’t use a cashback card if you can’t pay off your balance in full each month. You will pay the credit card company far more in interest than you’ll receive in cashback. If you can’t clear your balance in full get a 0% balance transfer or 0% purchase card.
Once you start spending on your cashback credit card you will receive the money you’ve earned in a lump sum once a year.
When you are ready to hand it over the charity make sure you use Gift Aid. This means the charity can claim back the income tax you paid on your donation. So, if you are a basic-rate taxpayer the charity will get 25% extra every time you donate.
All you have to do to ensure the charity can claim it is tick the Gift Aid box on your donation form.
Charity credit cards don’t qualify for Gift Aid tax relief, so this is yet another way that cashback cards trounce charity cards.