Dear EarthTalk: How do “affinity” credit cards work that donate a percent of your purchases to environmental organizations?
—Clifford Kagelbaum, Vancouver, WA
“Affinity” programs were developed by credit card companies in an effort to attract more customers by associating their cards with other businesses or organizations. While consumers may be more familiar with such programs that allow them to build up discount points with retailers and car companies or frequent flier miles with airlines, non-profit organizations are increasingly getting into the game by putting their logos on credit cards and garnering a small percentage of every sale.
Consumers like such programs because they can contribute to the charitable causes of their choice through the shopping they are already doing. Charities like them because they reap donations with hardly any effort. And credit card companies benefit by gaining access and marketing to millions of potential new customers.
Plastic-wielding environmental advocates can choose credit cards benefiting the Sierra Club, Nature Conservancy, Humane Society of the U.S., National Audubon Society and Wilderness Society, among many others. The credit card companies usually donate one half of one percent to the non-profit for every purchase, balance transfer or cash advance. Typically, the groups also get a donation for each new cardholder they sign up and for each renewal.
Some 55,000 card-carrying members of the Sierra Club have donated more than $1 million to the group since it started its affinity program in 1986. And the Humane Society of the U.S. reports that its decade-old affinity credit card program with MBNA has accounted for donations of hundreds of thousands of dollars each year from 37,000 account holders.
Working Assets is another affinity program worth considering for anyone who wants a portion of their consumer dollar to help environmental and other charitable causes. The company, according to its website, has generated over $47 million for nonprofits since it began in 1985, helping such organizations as Rainforest Action Network, Greenpeace, Oxfam America and Human Rights Watch. The company’s long distance and wireless phone services also donate to nonprofits and allow their customers to have a say as to which organizations receive donations and how much.
Consumer advocates warn, though, that racking up credit card debt is not economically responsible even if payments benefit charities. And customers should beware that affinity cards usually have higher interest rates than other cards. Also, savvy marketers have realized that pasting scenic photos of forests, mountains or wildlife on credit cards can attract more customers even without a specific donation-based affinity tie.
Websites such as CardRatings.com and CreditCardGuide.org can help potential customers see the forest for the trees when it comes to signing up for credit cards, affinity-based or otherwise.
CONTACTS: MBNA Cause-Related Credit Cards, www.mbna.com/creditcards/enviro_causes.html; Working Assets, www.workingassets.com/creditcard.cfm; CardRatings.com, www.cardratings.com; CreditCardGuide.org, www.creditcardguide.org.