/ Money

Throw charity credit cards a lifeline


Two banks have announced plans to scrap their charity credit cards. They may not perform brilliantly for charities but it’s a real shame that the opportunity to improve their potential has been lost.

In January, Bank of Scotland and Halifax, both part of Lloyds Banking Group, announced they’d be scrapping charity credit cards.

These work by donating a small proportion of everything you spend on the card. While they don’t raise much for charity, more should’ve been done to boost their value.

Paltry amounts donated to charity

One of the cards, launched in 1998 for donations to Cancer Research UK, has raised £14.5m in its lifetime. Though this may sound like a worthy sum, when you put it in the context of the £433m which Cancer Research received in 2010/11 alone, it’s clear that credit card donations have had little impact on charities’ finances over the past few years.

It’s not hard to see why. Most charity credit cards donate a tiny percentage of the total spent to charities, often just 0.25%. So, spending £200 on your credit card donates just 50p to charity.

On the assumption that only 0.25% is donated to charity through using these cards, that amounts to about £5.8m – next to nothing compared with the £56bn that was donated to all charities in 2010.

Don’t scrap charity credit cards – reinvigorate them

Although at Which? we’ve always taken the view that you’d be better off taking out a Best Rate cashback credit card and donating the money directly to the charity of your choice, it’s easy to understand the attraction of charity credit cards. They offer both the convenience and satisfaction of knowing that you’re making a donation every time you spend.

Rather than scrapping them altogether, it would be more encouraging to see Lloyds exploring ways to make the donations more generous, thus reinvigorating this niche market.

But as long as charity credit cards remain in their current sorry state, you’d be better off donating in other, more tax-efficient ways, such as payroll giving. And, when it comes to credit cards, stick to a good cashback card.

Have you ever had a charity credit card or would you get one if you thought they really helped a good cause?


Agree payroll giving – especially for higher-rate tax payers – is far more efficient. Say you donate £20 (gross) per month through CAF – it costs £12 after tax.

To make the same £20 per month donation through a 0.25% charity credit card, you would need to earn £13,300 (gross) per month to spend every month on the said card. Bankers only need apply.

For the rest of us, get a decent rate cashback card. If your card spend averages £1000-£2000 per month, the cashback will more-or-less offset the payroll contribution.

Sophie Gilbert says:
27 February 2012

I’ve had a charity credit card with the Co-op Bank for decades, donating money to Amnesty International every time I use it, and I also pay monthly contributions to Amnesty. I feel that however little my credit card gives to Amnesty, it’s better than nothing and it does amount to something not entirely negligible in the (perhaps very) long run.

However, this credit card isn’t the only one I use (for various reasons, one of them cashback), so my use of it is reduced, and I do agree that it would be encouraging to see banks exploring ways to make the donations more generous, thus reinvigorating this niche market.

Why not for example combine cash back and charity giving in one credit card? Or is it too blindingly obvious? Or are banks too greedy? It would encourage me to use my charity credit card more.