Information Center – News and Articles about Credit Cards
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Donating to Charities: Cash or Affinity Credit Cards?
Helping others for free and without waiting something in return is a really good cause. Americans have a reputation for altruistic wish to help those who are in need. Take, for instance, Hollywood celebrities, even the most spoiled and freaky ones, that earn incredible amounts of money, they loosen the purse strings to donate to research and rehab centers, to Greenpeace, help kids from the third world countries, etc.
But not just the rich and famous try to make this world better. Ordinary people, just like me and you, also strive to make their contribution to changing the world for the better. And credit card companies support such initiatives. They issue affinity cards for those who care.
Such credit card deals are issued by the world-wide known companies Visa and MasterCard. Though credit cards, in the first place, are associated with market, commerce, and profit oriented business, this industry really helps non-profit and charity organizations though affinity programs. This is how such cards work.
You get one of the affinity credit card offers. Make any types of purchases with them. And a certain amount of money (which is determined by your credit card agreement's terms and conditions) is donated to a charity partner. But let's figure out, are affinity cards actually so helpful? Can they save someone's life or give a shelter to those who are in need?
The best credit cards with affinity programs donate just 50 cents from $ 100 dollars you have spent. Even if you spend $ 1,000 a month with your credit card, your donation to some und helping starving kids in Africa will make up $ 60 a year. How many children, do you think, will you feed with 60 bucks in your pocket?
Well, of course your every dollar or even cent contributed counts. Besides, if at least a thousand people have affinity cards, and everyone contributes to the same organization $ 60 a year, that will be $ 60,000. And this is some real help. However, if you listen to reason, you will realize that donating in cash will be more helpful to those who are in need, and more beneficial for you. Why? It is pretty simple.
Assume you donate the same $ 60, but at a time and in cash. You say - what does it change? Your contribution is just the same, while you lose extra $ 60 that you could have earned through your affinity card rewards program. But look at it this way. With an affinity card you earn some certain amount of money and it is automatically donated to some charity organization. But you do not get any benefits from your card.
Actually, you can consider getting one of the rewards cards, a cash back credit card, for instance. This way you contribute to a good cause, get approximately the same amount of money though a cash back program and numerous bonuses that come with cash back offers. So, you contribute to a good cause, do not lose anything, and even get benefits. Everybody is happy.
Besides, the APR that affinity cards come with is usually pretty high. So, if you opt for one of the low rate credit cards, you can benefit more. You can even compare the rates and do some math on the difference between an affinity card's rate and a low APR's one. And if you are really willing to share, you can donate this difference (in the cash equivalent).
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Most credit tips say that the sooner you pay off your credit card balance - the less money you will lose on interest. On-time payments will favorably bound back on your credit score and payment history. This kind of advice is what we all are used to hear and read on the Web, in financial magazines, in tips columns. But does this financial behavior model really have a positive effect on your FICO score and credit report?
How can it be questioned, you ask? A perfectly disciplined plastic owner that pays off his or her balance before a lender could say Jack Robinson. Is not it any creditor's dream? No, it is not always so. Let's find out why a lender would want a different behavior model from a borrower and when this kind of paying down debts can weigh heavily against a cardholder.
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There are a number of embarrassing situations that are just a nightmare for cardholder. Feel no wallet in your pocket just before the cash register? See some unauthorized charges in your credit report? Loose you wallet with all your plastics in it? Very soon we are going to have no fear of these things, thanks to amazing technical progress.
Indivos Corp. which majors in computer hardware and software development has been working on an electronic system for making payments over a number of years. The thing about this system is that it enables transactions to be made by scanning customers' fingertips. A number of retailers have already expressed interest in testing the new system.
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Active credit card use is a sign of a society with well-developed market relationships. More and more people get involved in buying goods and services with plastics. Using virtual funds to make real purchases is very convenient. But this extended buying power has led Americans to a dangerous trend. Over 40% of American households, according to the USA Federal Reserve statistics, spend more money than they make.
In the average, every American of these 40% spends $1.2 per every $1 he or she earns. Plastics have changed people's spending habits. These plastic devices allow and encourage people to spend more and more money. Around 18% of all purchases made by Americans involve credit card use. About 24% of the purchases are made with other types of plastics.
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If you are determined to eliminate your credit card debts and you have good credit, getting a balance transfer card is a good idea. You can shift your credit card balances with high interest rate to a card with much lower rate or 0% APR at all. But there is one thing that can reduce your profit from this kind of a deal. It is balance transfer fee.
Most balance transfer cards come with a fee for a transfer. Not long ago you could easily find a plastic for balance transfers with no fee. However, due to the credit card market crisis and economy slowdown, lenders have pulled these deals from the market. And now it is rather hard for a customer to find a balance transfer card that comes with no fee. But there are some ways to negotiate a better balance transfer deal.
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