The Benefits of Ethical Credit Card Choices

The Benefits of Ethical Credit Card Choices

by Rebecca Hall on 18 Aug, 2011

Have you ever considered whether or not your credit card is ethical? The need to look after the world we live in and do whatever we can to help others less fortunate than ourselves is now more well-known than ever before. Many people want to do things to help charity and other good causes, but find it hard to find the time or to know exactly what to do. This is why it is such a good idea to consider charity credit cards. They might not be able to solve poverty and the gesture might ultimately be relatively small in the grand scheme of things, but everything you do makes a difference.

This article looks at exactly what charity credit cards are, how they work and some of the benefits that help to make them such a good, alternative ethical credit card choice.

Do something good

One of the main reasons to consider applying for a charity credit card is that they offer a simple way of doing something good. They work on a simple principle and so are easy to understand. When you take out a charity credit card, you are given a credit limit just as you are with all other times of credit card. Then, whenever you spend money on that card, you get cash back in return. The amount of cash back you get will depend on the specific card you have, and also some purchases might give you more back than others, but you can typically expect to get somewhere between 0.5% and 1% back on everything you spend.

This money then mounts up in a special charity account and you can then donate it to a charity. You could either choose to donate your saved-up money every month in order to make a regular contribution, or you might choose to save it up for longer so that you can make a bigger contribution but less frequently – the choice is up to you.

Help a charity of your choice

Another great benefit of charity credit cards is that you get to pick which charity (or charities) will be the beneficiary of your money. This means that if there is a cause you really support and want to help, or perhaps a local group that you feel deserves a donation, you can make the decision to support them.

Equally, if you are not sure who you want to donate the money to then your credit card company will generally have their own good causes that they like to donate to, and they are likely to encourage you to do the same. There will also generally be a list of charities available for you to look through, so even if you don’t yet know which you would like to donate to, all you need to do is log on to your online account to find out about the different options available to you and make a decision from there.

Build in to other ethical choices

Charity credit cards can also be built into other ethical choices in your life. As mentioned above, they might not make a massive difference on their own, but if you could perhaps persuade friends and family to adopt them too, this would help them to make a bigger impact.

There is also a growing range of ethical financial products available that you could also adopt for yourself. For instance, a variation on the traditional stocks and shares ISA is an ISA that gives you the opportunity to invest in firms that have a lower-than-average environmental footprint. This means that if you care about doing your bit for the environment and the people who could use a bit of extra help, as well as making the most of your money, there is an increasing choice of options open to you.

Benefit from other card rewards

Of course, if you take out a charity credit card, the fact that you can use it to make charity donations isn’t the only benefit. You can still make use of the other benefits associated with credit cards. For instance, you’ll still benefit from purchase protection, be able to manage your account online and more.

This means it’s definitely worth remembering to investigate things such as the APR to make sure it’s competitive, and whether there are any interest free periods when you first take out the card. These are unlikely to be as significant as they’d be with interest free credit cards as the focus of charity cards is different, but there are still other benefits to be had so these definitely should not be overlooked.

About the Author

Rebecca Hall

Rebecca Hall worked as an independent mortgage adviser for 10 years before turning to financial journalism full time. She has strong links to the CAB advising families on mortgage refinancing.