What
is an Affinity Credit Card?
Better
Business Bureau (BBB)
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 organisation and a credit card company. Sometimes
offered exclusively to an organisation's donors or members, most
of these credit cards are issued by banks and credit card companies
under agreements worked out with individual charitable organisations.
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:
- 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 sterling amount every time a new customer signs up
for a card; or
- a
portion of the annual renewal fee for the card.
- 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. If the financial benefit for the charity is
not spelled out, ask.
- 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.
- 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.
- 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
.
©
2003 Council of Better Business Bureaus
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OCIS
provide general financial information, we urge you to consult an
Independent
Financial Adviser ( IFA )
before making any important decisions about your finances. |
