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Plastic is fantastic for charitable giving – but only if you repay in full

Plastic is fantastic for charitable giving – but only if you repay in full

Category: Credit cards

Updated: 31/10/2008
First Published: 06/03/2008

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

As we head towards spring, we see the return of many high profile charity events including Sport Relief and Race for Life. But giving to charity doesn't have to be limited to sponsorship on an event once a year.

Credit Cards

Many charities have their own credit card. These credit cards make a donation to the charity when you open the credit card and then make a further donation each time the credit card is used. The more you use the credit card, the more the credit card provider donates to the charity.

The credit cards work by donating a percentage of the amount spent on the credit card. For anyone who uses their credit card throughout the month and then pays the bill off in full at the end of the month, they could make donations to charity without it costing them a penny.

Whatever your preferred charity there is likely to be a credit card for you. Some credit cards donate to more than one charity such as the Barclaycard Charity Visa, while other are aimed at one specific charity such as the Cancer Research UK MasterCard.

Unfortunately charity credit cards don't offer market leading deals for balance transfers or introductory purchases. It's worth making sure the full deal that comes with the credit card suits your needs. Otherwise you could see yourself out of pocket.

For example, Barclaycard Simplicity Visa charges 6.8% APR. By spending £1,000 on this card, rather than on the Greenpeace card (outside any introductory deal) you could save nearly £100 in interest over the course of a year, ultimately giving you the option to donate more money than the £17.50 you would have donated with the Greenpeace card.

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Another way to donate money is by saving money in a charity savings account. The institution makes a donation, which is a percentage of the balance in your savings account. The more you save, the more they donate to the charity.

With rates as high as 6.51% being paid on savings accounts requiring notice and 6.21% paid on savings accounts with no notice, these accounts are far from market leading. Savers could be better off opting for an account paying a higher rate of interest and then donating a portion of that interest to the charity.

However for those who don't want the hassle of sorting out donations to a charity, but want to do their bit, these could be a viable option.

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.