Charity credit cards

Reader Marcello Piraino proposes a credit card cash back program where the cash goes to charity.

Virtually every person in the western world uses either Bank Cards or Credit Cards (in many cases both) for their purchases. Whether you buy stuff from the grocery round the corner or buy a Gucci Bag for your wife’s birthday there’s an electronic transaction that takes money from your bank account and transfers it to the seller’s bank account. The nudge is, “Donate 1 cent every 1 Dollar while doing your shopping.”

Every Dollar spent will give 1 Cent to a Charity Organisation. It would need to find an agreement between (1) Card holders, (2) Banks that issue the cards or Credit Card Issuer like MasterCard and (3) Charity Organisations.

Basically, one will be donating without even noticing and, at the end of the day (or month or year) a significant amount will be given to help someone else out. You can do the maths yourselves to see the nudge potential.

Shops should sponsor that because it could increase their business, Government and banks should sponsor that too because encourages even further the use of electronic transaction thus reducing the need for printed money (I can think of other advantages but it is not really important). Regularly, a statement of the donations made could be delivered to the card holder and the donations could be used to obtain a tax reduction.

One percent is typically the number that credit cards advertise as the amount of total purchases that they refund to customers, but there is nothing special about the number. A credit card company could allow customers to designate an extra 1-5 percent of purchases to a charity of their choice.

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3 Responses to “Charity credit cards”

  1. Josh Says:

    This already exists – it’s run by Working Assets, and you can see the details here: http://www.workingassets.com/CreditCard/Default.aspx

    Every time you make a purchase, 10 cents is donated to a group of charitable organizations (which you can vote for along with other cardholders).

  2. John Says:

    I like it, and it’d be nice if there were mainstream options at some of the larger banks instead of having to hunt out Working Assets. I’d also like an option that, instead of charity, gave the option of putting the funds into a college savings plan or a retirement fund.

  3. Brian White Says:

    Very cool idea. I think that some of the Aussie card issuers are tossing up whether or not to introduce this to the Australian Credit Card market. Check out: http://www.creditcardhelp.com.au

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