Not just flexible but philanthropic, too

The cards can offer good value if you pay them off in full every month

IN THE Eighties, excess was all. The bigger the wodge of plastic in your wallet, the better. In the caring Nineties, however, credit cards have taken on a less selfish slant. The past few years have seen a boom in affinity cards - credit cards that pay a donation to the charity or organisation of your choice every time you use the card.

Moreover, for card users who pay off their bill every month, these cards can be competitive with anything else available.

You can now get a credit card linked to one of more than 400 charities, political parties and other organisations. The biggest UK affinity card issuer, the Bank of Scotland, has cards linked to organisations as diverse as Battersea Dogs Home, the Constabulary Travel Club, Millwall Football Club and even the National Federation of Fish Fryers.

More organisations are jumping on the card bandwagon all the time. The Consumers' Association, for example, is considering launching a card for readers of its magazine, Which?.

Dave Roberts, a director of the association, said the card would be priced competitively but "the really different thing we'll offer is free legal advice for any problems with purchases made using the card".

So what is the deal the estimated three to four million affinity cardholders are actually getting?

An affinity card will, typically, pay a fixed donation to the linked organisation of 25p for every pounds l00 spent on the card, on top of, perhaps, a pounds 5 donation the first time you use the card. A donation of 25p for every pounds l00 may not sound much, but the sums can add up. The Bank of Scotland affinity cards have paid a total of pounds 1.3m so far to charities, with the biggest beneficiary - the International Fund for Animal Welfare - getting more than pounds 346,000.

Nevertheless, it is not worth choosing a card purely on the basis of loyalty to the organisation to which it is linked. It is also important to check that the card itself is good value. Take, for example, the Halifax Visa Charity Card, which charges a pounds l2 annual fee, pounds 5 of which is rebated to the chosen charity each year. It also donates 20p for every pounds 100 spent.

But cardholders could instead opt for a non-affinity card which does not charge a fee and simply give the charity each year the pounds 12 they would otherwise pay for the Halifax card. This non-affinity route would actually leave the charity better off, unless the cardholder spends more than pounds 3,500 a year - the spending required to make up the pounds 7 of the annual fee that is not rebated to the charity.

However, the cards can offer good value if you choose the right issuer and pay the card off in full each month. The best value if you are in this position is to choose a card with no annual fee.

The options include Midland's CareCard Mastercard, which offers a choice of 16 charities; the Co-operative Bank's Visa card, which is linked to a handful of big charities and guaranteed free for life as long as you use the card 10 times each year; and the Bank of Scotland's Affinity Mastercard, which is linked to 69 charities and is free provided you spend at least pounds 2,000 on the card each year (see table).

But beware if you often borrow on your credit card. There are now cheaper, non-affinity credit cards to choose from. True, the annual rates charged for borrowing (APRs) on many affinity cards - at around 20 to 24 per cent -are in line with many of the big credit cards on the market. But at up to four times the bank base rate of interest, these are all appallingly expensive.

By comparison, for people who borrow a lot on their card, the Robert Fleming/Save & Prosper Visa card charges an APR of just 11.5 per cent, with no annual fee. The card, however, has no interest-free period - you pay interest on each purchase from the date it is made - so it is poor value if you quite often pay off your bill in full. Alternatively, a new card from Advanta/Royal Bank of Scotland offers an interest-free period, charges no fee and has an APR of less than 16 per cent.

It is also worth bearing in mind that, while charities very much welcome the additional income that affinity cards bring in, there are more reliable and much more tax-efficient ways of making donations. These include:

q Payroll giving. If your employer runs a Give-As-You-Earn scheme, you can give a set monthly amount to the charity of your choice. You get tax relief at your highest rate of income tax on donations of up to pounds 75 a month (pounds l00 from 6 April). For a higher-rate taxpayer, this means that for every pounds 6 reduction in their taxed income, the charity effectively gets pounds 10.

q Gift Aid. You also get full income tax relief on single donations to charities of at least pounds 250. The gift is paid net of 25 per cent tax to the charity, which can then reclaim the tax, while higher-rate taxpayers can reclaim an extra 15 per cent relief on the gift through their tax return.

The Charities Aid Foundation (01732 520000) offers an account which allows you to benefit from the pounds 250 Gift Aid tax relief while spreading the donation between several charities. You can also open this account if you donate more than pounds 10 a month via payroll giving, and then use the chequebook and debit card offered with the account to give to any recognised charity.

q Jean Eaglesham works for `Investors Chronicle'.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
Ellie Levenson’s The Election book demystifies politics for children
bookNew children's book primes the next generation for politics
Sport
Adnan Januzaj and Gareth Bale
footballManchester United set to loan out Januzaj to make room for Bale - if a move for the Welshman firms up
Arts and Entertainment
Lena Headey as Cersei Lannister in Game of Thrones
film
News
i100
Sport
Yaya Sanogo, Mats Hummels, Troy Deeney and Adnan Januzaj
footballMost Premier League sides are after a striker, but here's a full run down of the ins and outs that could happen over the next month
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: VP/SVP Credit Quant- NY- Investment Bank

Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...

Selby Jennings: Quantitative Research | Equity | New York

Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...

Selby Jennings: SVP Model Validation

Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

Day In a Page

War with Isis: The West needs more than a White Knight

The West needs more than a White Knight

Despite billions spent on weapons, the US has not been able to counter Isis's gruesome tactics, says Patrick Cockburn
Return to Helmand: Private Davey Graham recalls the day he was shot by the Taliban

'The day I was shot by the Taliban'

Private Davey Graham was shot five times during an ambush in 2007 - it was the first, controversial photograph to show the dangers our soldiers faced in Helmand province
Revealed: the best and worst airlines for delays

Revealed: the best and worst airlines for delays

Many flyers are failing to claim compensation to which they are entitled, a new survey has found
The stories that defined 2014: From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions

The stories that defined 2014

From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions
Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations

Disaster looming? Now you know where to head...

Which British city has become the first to be awarded special 'resilience' status by the UN?
Finally, a diet that works: Californian pastor's wildly popular Daniel Plan has seen his congregation greatly reduced

Finally, a diet that works

Californian pastor's wildly popular Daniel Plan has seen his congregation greatly reduced
Say it with... lyrics: The power of song was never greater, according to our internet searches

Say it with... lyrics

The power of song was never greater, according to our internet searches
Professor Danielle George: On a mission to bring back the art of 'thinkering'

The joys of 'thinkering'

Professor Danielle George on why we have to nurture tomorrow's scientists today
Monique Roffey: The author on father figures, the nation's narcissism and New Year reflections

Monique Roffey interview

The author on father figures, the nation's narcissism and New Year reflections
Introducing my anti-heroes of 2014

Introducing my anti-heroes of 2014

Their outrageousness and originality makes the world a bit more interesting, says Ellen E Jones
DJ Taylor: Good taste? It's all a matter of timing...

Good taste? It's all a matter of timing...

It has been hard to form generally accepted cultural standards since the middle of the 19th century – and the disintegration is only going to accelerate, says DJ Taylor
Olivia Jacobs & Ben Caplan: 'Ben thought the play was called 'Christian Love'. It was 'Christie in Love' - about a necrophiliac serial killer'

How we met

Olivia Jacobs and Ben Caplan
Bill Granger recipes: Our chef's breakfasts will revitalise you in time for the New Year

Bill Granger's healthy breakfasts

Our chef's healthy recipes are perfect if you've overindulged during the festive season
Transfer guide: From Arsenal to West Ham - what does your club need in the January transfer window?

Who does your club need in the transfer window?

Most Premier League sides are after a striker, but here's a full run down of the ins and outs that could happen over the next month
The Last Word: From aliens at FA to yak’s milk in the Tour, here’s to 2015

Michael Calvin's Last Word

From aliens at FA to yak’s milk in the Tour, here’s to 2015