The Ins and Outs of Affinity Cards

Chances are you already have three or four credit cards stuffed in your wallet or purse, so what could possibly tempt you to sign up for another one? One gimmick that might reel you in is the affinity card, with its promise that your favorite charity will get a percentage of every dollar you charge on the card. You can even get a fancy card with your charity’s logo on it. It sounds great, but there are some questions you need to ask before you apply.

The most obvious question is how much your charity will get out of your using the card. Credit card companies are likely to offer vague answers to this question, but you want specifics. If the charity gets a flat amount for every person that signs up for the card, how much is that? And what percentage of your purchases will go to the charity? Armed with these figures, you can do the math. If the charity gets 0.5% of all your purchases and you put $5,000 a year on the card, that puts $25 into the charity’s bank account. Not a lot of cash, and if you itemize deductions on your tax return, you might be better off sending the charity a check and taking the write-off.

Don’t forget to do due diligence on annual fees, interest rates, and other credit-card terms like grace periods and late payment penalties. Compare the credit card rates to those on the cards you already have and to other cards that you could apply for. Just because your favorite charity gets a cut of your spending doesn’t mean you shouldn’t use your financial common sense before you make a final decision.