Key takeaways
- Affinity playing cards are bank cards which can be linked to a charity or nonprofit group and donate a portion of every transaction to that group.
- Monetary establishments typically provide affinity playing cards at no cost, growing the variety of smaller nonprofits they will accomplice with.
- Affinity playing cards have distinctive professionals and cons, resembling serving to elevate cash for a charitable trigger however probably providing fewer profitable rewards for the cardholder.
In our busy lives, it’s simple to overlook to offer again. And with costs rising throughout us, it may be onerous to carve out room in our budgets for charitable giving. Those that want to discover methods to offer again could admire how simple affinity playing cards make it to donate to charities and nonprofits.
Affinity playing cards — which are sometimes referred to as charity bank cards — are a kind of bank card that donates cash to a charity while you first open the bank card or donates a really small proportion of every transaction you make to a charity.
Let’s take a better take a look at what affinity playing cards are, how any such bank card works and what the professionals and cons of any such card are.
What’s an affinity card?
An affinity bank card is a kind of bank card that’s linked to a charity or nonprofit. These playing cards typically bear the title and brand of their linked group. When a monetary establishment companions with such a corporation to create an affinity bank card, the monetary establishment normally presents some financial incentive to the group — a donation for each bank card opened or cost made, for instance.
Typically, when a financial institution presents affinity playing cards, they offer the cardholder the choice to decide on between a choice of totally different nonprofit organizations that they will help. Affinity playing cards may help help charities, educational teams, nonprofit sports activities golf equipment and fraternal organizations.
How affinity playing cards work
Affinity bank cards are just like co-branded bank cards in that two organizations, a monetary establishment and a model, come collectively to subject a bank card that advantages each of them. However whereas co-branded bank cards are normally issued by for-profit establishments, affinity bank cards, with some exceptions, are normally partnered with nonprofits. The nonprofit can specify the way it plans to make use of the donations it will get from the affinity card, which may make signing up for one in every of these bank cards extra motivating as you understand what the donations are going towards.
For instance, affinity playing cards that help a nonprofit college’s alumni affiliation are pretty frequent. A college alumni membership could resolve that each donation will go in direction of funding scholarships or planting timber on the campus.
The partnering group normally will get a one-time, flat-rate donation every time a brand new bank card account is opened, and it could additionally earn a proportion of purchases made by the brand new account holder. Though such donations are comparatively small, the partnering group may profit from elevated visibility and consciousness for its causes.
Often, the monetary establishment will cost the affinity group for its advertising and marketing prices or ask for a few of its member knowledge to assist purchase prospects for itself. Nonetheless, many monetary establishments at the moment are partnering with nonprofits to subject affinity bank cards at no cost, growing the variety of smaller nonprofits with which they will do enterprise.
Fashionable affinity card examples
One fashionable affinity card is the Susan G. Komen® Custom-made Money Rewards Visa® bank card from Financial institution of America*. The charitable group — Susan G. Komen for the Treatment — has partnered with monetary establishments Financial institution of America and Visa to subject a bank card that gives each rewards to the cardholder and donations to the group itself. Financial institution of America donates $3 per 12 months to Susan G. Komen for many account renewals, $3 for every new cardholder and 0.08 p.c of all retail purchases (minus returns) made inside 90 days of opening the account.
Financial institution of America additionally points affinity playing cards for numerous school alumni packages, together with packages for Clemson, Columbia and NYU. Nonetheless, you need to be an alumni member to use.
Professionals and cons of affinity playing cards
An affinity card could look like an objectively good factor at first look, however it isn’t the appropriate match for all shoppers, and there are some downsides to any such bank card. To raised perceive if an affinity card is an efficient match for you, let’s look at the benefits and downsides.
Professionals
- Charities achieve a passive income stream: The entire level of an affinity card is to assist in giving again to a trigger that issues to you. They have an inclination to generate a small quantity of passive income, which shoulders among the fundraising burden charitable organizations face day by day.
- Retailers aren’t affected: The monetary establishment that points the affinity card is the one to donate cash, so that you don’t have to fret about taking cash away from a small enterprise when making a purchase order along with your affinity card.
- Ongoing donations: Search for an affinity card that offers an preliminary sign-up bonus and ongoing donations for every buy you make along with your bank card, that method you understand your transactions are serving to help the charity on an ongoing foundation.
- Money again and rewards factors: Some affinity bank cards provide typical bank card perks like money again, airline miles and different types of rewards along with donating cash to charity.
- Introductory presents: Some affinity playing cards additionally include tempting introductory presents like low introductory rates of interest.
- Extra visibility for the charity: Many charities admire the small donations they get from affinity playing cards, however in addition they take part in these packages to assist unfold extra visibility about their work.
- Passive giving: Understanding you’re donating cash to a trigger near your coronary heart by utilizing your affinity card could make it simpler to help a charity you care about whereas additionally not harming your funds.
Cons
- Small donations: Some affinity bank cards solely include an preliminary sign-up bonus of as little as $1. Even the affinity playing cards that give cash for each buy made are usually for a really small quantity (about .05 p.c), in order that they don’t elevate that a lot cash for charities until lots of people use these bank cards.
- Not tax deductible: For the reason that cardholder isn’t the one straight making a donation, they will’t deduct these donations from their revenue taxes.
- Fewer perks: Whereas affinity playing cards can include cardholder perks, they do have a tendency to come back with much less beneficial rewards than different bank cards.
- Danger of cancellation: If the monetary establishment issuing the affinity card and the charity select to cancel their partnership, then you definately threat having your card canceled and dropping any rewards you had been in a position to accumulate. You additionally will lose the power to make use of the bank card, which may be irritating should you use the affinity card to arrange recurring purchases resembling subscription providers or payments.
Alternate options to affinity playing cards
Affinity playing cards aren’t the one option to earn cash in direction of an excellent trigger each time you make a purchase order. Many rewards bank cards mean you can donate your money again rewards to charity. For instance, many American Specific bank cards, just like the The Platinum Card® from American Specific, mean you can redeem your American Specific Membership Rewards factors within the type of a donation to greater than 1.5 million registered U.S. nonprofit organizations (phrases apply).
Likewise, Citi additionally permits cardholders to redeem ThankYou factors in direction of charities, together with American Pink Cross Catastrophe Aid, the ASPCA and Susan G. Komen.
Another choice is to make use of your bank card to earn money again such as you usually would, after which donate some or all your money again rewards to charity straight. This manner, you could have a large alternative of organizations to donate to, and you can get a tax deduction in your charitable giving.
The underside line
Affinity playing cards have distinctive benefits and downsides like another sort of bank card. The principle perk of an affinity bank card is that it may assist elevate cash for a charitable trigger. That stated, the cardholder rewards are sometimes much less profitable. It’s possible you’ll be higher off utilizing a traditional bank card to earn money again rewards after which utilizing that money to make a direct donation to a charity — which can make it attainable to get a tax deduction.
When procuring the greatest bank cards for charitable donations, take a look at the charges, rewards choices and rates of interest every card presents fastidiously. That method, you possibly can decide which card is one of the best match in your targets.
*The details about the Susan G. Komen Custom-made Money Rewards Visa bank card from Financial institution of America and Aspiration Zero card has been collected independently by Bankrate. The cardboard particulars haven’t been reviewed or permitted by the cardboard issuer.
