How to maximise your charity donations with a credit card

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. But there can also be additional costs, such as admin or card-processing fees, which water down your contributions.

So if you want to make the most of your donations, use this guide to learn about the different costs you’ll need to factor into your payments. We also go through how you can earn and redeem points for donations with a reward credit card and look at charity credit cards you can compare so you can support charities in a way that works for you.

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

While charities may charge a fee for donations made by credit card, it should be limited by what it costs them to process the payment. Usually this ranges from 0.5% to 3% depending on the card, with Visa and Mastercard credit cards typically attracting a lower fee than American Express cards. So 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. Make sure you check for these costs before making a donation so you know exactly how much you’ll end up paying.

Credit card rewards and charity donations

Earning points for 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. Keep in mind that you’ll only earn points for your donations if they’re processed as “purchases”, with most reward programs excluding cash advance transactions and BPAY payments from earning points. In most cases your donation should be considered a regular purchase, but if you’re unsure, contact your credit card provider to ask about how your donation will be processed.

Using credit card reward points for charity donations

Many credit card reward programs also let you use points to make a donation to participating charities. This can be a convenient alternative if you don’t want to use your card to make a donation or if you want to avoid additional fees.

Use the table below to check out different credit card reward programs that let you redeem points for a charity donation. We’ve also listed the charities available and the minimum points you’ll need for a donation.

Minimum point values accurate as of 6 January 2020.

Different point requirements for charity donations

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. This is the case even within the same rewards program.

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, on the other hand, costs 3,400 points.

The dollar value of the reward points you use for a donation also varies between credit card reward programs. 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.

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 two charity credit cards you can consider:

• Community First Low Rate Pink credit card. This Community First Credit Union 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.
• Bendigo Bank RSPCA Mastercard. This card donates a percentage of your spending to the RSPCA Adoptapet program. It also gives you the option of setting up monthly $5 donations, with a receipt provided annually so you can claim back the cost at tax time.

What else do I need to know?

Here are some other key factors to keep in mind when you’re planning to use your credit card to make a donation to charity:

• How donations are used. Most charities use a percentage of your donation for administrative and fundraising costs. Check with individual charities to find out how your donation is used so you know exactly where your money’s going.
• Point value. If you’re using credit card reward points to make a charity donation, you may want to 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 when using your credit card account so that you can avoid going over your credit limit.
• Card fees. A fee of 0.5% to 3% of your donation may apply when you use a credit card or debit card. Remember to factor this into your budget when making a donation.
• 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.

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