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How to use your credit card for charity donations

Lots of charities accept credit card donations, and sometimes you can even use reward points. Let's take a look at how it works.

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Giving to a charity can be a great way to spread goodwill and support causes you believe in. There’s also the added benefit of a tax deduction for any eligible donation over $2. Here, we explore the different ways you can make charity donations with a credit card – including a couple of charity credit cards.

How much will I pay when using a credit card to make a donation?

You can you make a donation with a credit card and when you do, many charities will charge a fee for donations made by credit card. It should be limited to what it costs them to process the payment, which usually ranges from 0.5% to 3%, depending on the card.

If you made a $100 donation using your credit card, you could pay an extra $0.50 to $3 for the transaction.

Some charities may also pass on other admin costs, such as direct debit subscription charges or membership fees.

How much of my donation actually goes to the charity?

Again, this varies depending on the charity, but they must be transparent about how they spend their money, so you can get this information fairly easily from their websites and annual reports.

For example, CARE Australia’s website explains that 9 cents per $1 went towards administration and fundraising costs in 2019/20, and 91c in every dollar went towards their charitable pursuits.

Meanwhile, Save the Children's website explains that 19 cents in every dollar goes towards fundraising, systems, teams and staffing.

Credit card rewards and charity donations

If you use a reward or frequent flyer credit card to make a charity donation, you could also earn points per $1 spent.

Many credit card reward programs now also let you use points to make a donation to participating charities. Use the table below to check out different credit card reward programs that let you redeem points for a charity donation.

While the table shows the minimum points required for a donation, reward options might vary based on the charity you want to donate to and the amount you'd like to donate.

For example, while charity donations made through the Westpac Altitude Rewards program start from 3,350 points, this is only available if you redeem a $20 donation for Good Return. A $20 donation to Oxfam or Starlight Children's Foundation costs 3,400 points.

The dollar value of the reward points you use for a donation also varies between credit card reward programs and the table below gives you a breakdown of the points-to-donation values for the reward programs offered by American Express, ANZ, NAB, St.George and Westpac.

We've also included details of the average points you could earn per $1 spent with a personal credit card linked to one of these reward programs. Keep in mind this is an average based on the earn rates for each personal card that earns rewards, so you could earn more or less points depending on the rewards card you use.

Reward programPoints redeemedDonation valueDonation per pointAvg points earned per $1 spent on purchasesDonation amount per $1 spentRank
Amex3000$25.00$0.0083331$0.0083331
ANZ4685$25.00$0.0053361.5$0.0080042
NAB1540$10.00$0.0064941$0.0064944
St.George3400$20.00$0.0058821.167$0.0068653
Westpac3350$20.00$0.0059701.083$0.0064665

Based on these details, American Express and ANZ offer the most value for money if you want a credit card that lets you use points to contribute to charity.

Charity credit cards

Another option is to get a credit card that's linked to a specific charity. These cards give you a way to support charity through regular, automatic donations from your account. Currently, there are 2 charity credit cards you can consider:

  • Community First Low Rate Pink credit card. This credit card donates half of the $40 annual fee to the McGrath Foundation. These funds help with the placement of McGrath Breast Care Nurses who work in supporting women with breast cancer as well as their families.
  • Community First Low Rate Blue credit card. Similar to the Low Rate Pink card, the Community First Low Rate Blue credit card also donates half of the $40 annual fee to a good cause: the Prostate Cancer Foundation of Australia (PCFA). This helps support people diagnosed with prostate cancer, as well as their families and others affected by it.

How can I redeem points for charity donations?

While reward options can vary between programs, generally you’ll be able to redeem points for a charity donation in the same way you’d redeem a gift card or merchandise. In most cases, this is as simple as logging in, going to the rewards store and searching for “donations” or “charities”. Then you can select the organisation you want to support and follow the prompts to redeem your reward.

What else do I need to know?

  • Point value. If you’re using credit card reward points to make a charity donation, consider whether the value you’re getting through the redemption is worth it. In some cases, using cash to make a donation and saving points for a different reward could be more cost-effective.
  • Processing times. In some cases, your donation may not show up on your account straight away. This is particularly common with crowdfunding donations, which may be held or left unprocessed until a target or deadline is met. Make sure you factor this in so you can avoid going over your credit limit.
  • Direct debit payments. If you decide to make regular payments to a charity through a direct debit service, make sure you check for any additional fees or charges. It’s also a good idea to read through the cancellation policy so that you know what’s involved if you decide to stop your payments.
  • Tax deductions. Keep in mind that you’ll only be able to claim donations from charities and organisations that are registered as deductible gift recipients (DGRs). Some payments to these organisations may also not be eligible for tax deductions, such as tickets to fundraising dinners or raffles. So always check with the organisation before assuming you’ll get a tax deduction – and remember to keep your receipts for tax time.

Whether you want to make a one-off donation or support a charity on an ongoing basis, credit cards can be a convenient way to make donations. Some cards also give you alternative ways to support charities through rewards programs or ongoing partnerships. But remember to weigh up the cost of any fees and check how your money will be used so that you can make every donation count.

Pictures: Shutterstock

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