Charity credit cards

Many major UK charities now have charity credit cards in their names, allowing you to donate a percentage of your spending to them... but there may be better ways to give.

Key points

  • Donations from charity credit cards are automatically processed by the card company
  • Typically only a tiny percentage of your spending is donated
  • Beware of high interest rates if you don't pay your balance in full every month

If you want to donate money regularly to charity, you might want to consider a charity credit card.

These cards automatically donate a percentage of your spending to a specific charity on your behalf.

Many major UK charities now have credit cards in their names.

On 13 November, 2014, analysed 249 credit cards listed on the matrix of independent financial researcher Defaqto and found that 23 were affiliated to 22 different national charities, from the Royal British Legion to the RSPB.

However, as Defaqto only tracks charity cards for national charities, there may be a number of regional charity-affiliated cards as well.

What's more, Defaqto notes that there are a number of charity cards from credit card issuer MBNA which are not included on the matrix, so the actual number of charity cards available is likely to be higher.How to make your credit card work harder for you

But even if a credit card affiliated to your charity of choice is available, you might want to consider other ways of donating - the credit card option may not be the most efficient.

The pros of charity credit cards

Perhaps the biggest plus point of charity credit cards is that your donations are automatically processed by the card company on your behalf.

This means that you won't have to worry about setting up a regular payment yourself.

Some cards also donate an introductory bonus to the charity when you sign up, and another when you use your card for the first time.

You may also find that some cards offer benefits such as interest-free introductory periods on purchases and/or balance transfers.

However, if you want to spread the cost of a big spend or pay off your debts, you should consider whether going for a dedicated 0% purchase or balance transfer card could get you a more appropriate deal.

The cons of charity credit cards

The biggest negative about this type of card is the percentage of your spending that typically gets donated to charity - this can be tiny, in some cases lower than 0.01%.

If you're committed to donating a regular amount each month, you may well be better off opting for a cashback credit card and paying the money to the charity yourself.

While this may be more hassle for you, as such cards generally return far better rates of cashback your donations to your chosen charity could be larger.Cashback credit cards

What to watch out for

If you do opt for a charity credit card, the key to making the most of it is paying off your balance in full each month.

If you don't do that, you'll be hit by interest charges which will leave you out of pocket.

And don't be tempted to overspend to increase the amount you donate. Set yourself a manageable budget each month that you can pay off.