No credit card charges on Red Nose donations

Leading credit and debit card issuers have agreed to waive their processing charges on all charitable contributions made using plastic during Friday's Comic Relief Red Nose Day.

Leading credit and debit card issuers have agreed to waive their processing charges on all charitable contributions made using plastic during Friday's Comic Relief Red Nose Day. The agreement is an extension of a deal agreed among card issuers in response to the Boxing Day tsunami disaster. In January, leading banks, building societies and credit card providers said they would waive the charges usually made on plastic transactions for donations to tsunami appeals.

That move followed criticism of the financial services industry, which would have otherwise earned significant sums from charitable donations made in response to the disaster. Charities such as British Red Cross and Save the Children faced bills of up to £300,000 for processing fees, enough to provide drinking water for 420,000 people.

Card providers charge fees of between 1 per cent and 2.5 per cent each time plastic is used in a transaction. The fee is paid by the organisation receiving the payment. The money covers the cost of processing the payment electronically and guaranteeing the funds.

Apacs, the body that coordinates Britain's card settlement systems, said the latest agreement meant charities would not have to pay anything on donations made through the Comic Relief appeal.

"The response from the British public to the tsunami in South-east Asia has been amazing," said Sandra Quinn, a director of Apacs. "The waiving of charges on donations has boosted the amount that charitable groups can spend. The card industry will extend its waiver on card charges to charities involved in the forthcoming Comic Relief Red Nose Day."

However, Apacs rejected calls to make all charitable donations made using debit and credit cards fee-free. It said exempting tsunami donations from charges had cost the industry about £1 million.

Cardholders had donated £100 million in January to the central Disasters Emergency Committee and other charities working with victims of the tsunami. The average donations made were £77.55 by credit card and £49.24 by debit card, Apacs said.

Leading charities urged donors to remember to use Gift Aid when giving to Comic Relief. The tax break, worth 28p in the pound to charities, is available on all gifts made by UK taxpayers, but is often forgotten.