Virgin charity credit card tops donations table
Virgin Money's charity credit card allows users to donate 1.02% of spending to the good causes of their choice
A new credit card launched this week could offer a convenient way for people to support good causes – particularly less high-profile charities.
The Virgin Charity Credit Card, unveiled by Sir Richard Branson's finance arm, Virgin Money, will donate the equivalent of up to 1.02% of all spending to a charity of the cardholder's choice. That should propel the card to the top of the best-buy tables in terms of the proportion of spending donated, as many leading charity credit cards give only about 0.25%.
However, where the new plastic really scores is in the large choice of charities people can support – from household names to small local or specialised ones – and its flexibility. Unlike most charity cards, which raise money for a specific good cause, this one allows people to choose up to five charities, and they can chop and change if they wish. "As an example, we have seen from the recent earthquake disaster in Haiti that people are keen to help in cases of dire need, and this card ensures they can react quickly," says a Virgin Money spokesman.
The company says this is the first charity card to allow customers to add gift aid to their donation, thereby increasing the amount of money the good cause gets by 28% for cardholders who are also UK taxpayers.
Charity credit cards allow you to raise money for your favourite cause as you shop, and are often popular with those who pay off their bill in full each month, thereby avoiding interest charges.
They generate an estimated £16.7m a year in donations, making them a vital source of income for many organisations. For example, the WWF credit card (the result of a link-up with MBNA) has, to date, raised more than £10m for the wildlife charity. However, what each individual organisation gets out of its card can vary dramatically.
Many of the leading cards give the charity 25p for every £100 you spend – ie, 0.25% of spending. That is the case for the cards raising money for Oxfam, Help the Aged and Greenpeace, among others. Some are more generous, handing over perhaps 30p (eg the National Trust card) or 40p (the WWF card) per £100 spent.
But these donations are often boosted by other payments – such as a one-off donation when the card is taken out, and further payments designed to encourage people to keep their accounts active. For example, the British Heart Foundation (partnered with MBNA) gets a chunky £50 when you use your card within 90 days of taking it out. The WWF gets £40, plus £2 for every year you continue to spend with it, while the National Trust (MBNA again) receives £36 and £2 respectively.
Oxfam, Help the Aged and Greenpeace – whose cards are all provided by the Co-operative Bank – each get £15 for every account opened, plus £2.50 if you use your card in the first six months.
The new Virgin card doesn't offer any of these extra payments, so for some people, other cards might arguably offer a better deal. Strictly speaking, the Branson plastic is a cashback card, and you don't have to donate the cash – you can choose to have it sent to you annually by cheque, though that would seem to rather go against the spirit of the thing. You earn 0.8% cashback on everything you buy.
If you are eligible, Virgin can also claim gift aid to increase your donation to 1.02%. So if you spent £100, this would generate 80p, which would, after gift aid has been claimed, produce a £1.02 donation.
When you take out the card, the company will automatically set you up a Virgin Money Giving account, allowing you to select who will receive your cash. Virgin Money Giving is the group's not-for-profit online charity fundraising service. This is free for fundraisers to use but charges charities fees, which the company says are the minimum needed "to cover the running costs of the site".
The choice of charities cardholders can donate to is lengthy, but if the charity you most want to support is not on the list, then it's simple for them to join – Virgin Money says it will contact the organisation to set up an account.
The card is issued by MBNA, charges a "typical" interest rate of 12.9% APR, and offers a lifetime balance transfer rate of 8.9%, on which consumers pay a handling fee.
Meanwhile, Virgin has signed a five-year deal to be the official sponsor of the London Marathon, which takes place on 25 April.
Writers name
Rupert Jones, The Guardian 05-03-2010
Advertisers Company:
Consort Charity
Advertiser's website:
http://www.consort24.com