If you carry a bank credit card, why not let it be one that helps your favorite non-profit organization?
Automatically donate to non-profit organizations
Imagine charging $500.00 on your bank credit card, knowing that $2.50 of it will go to your favorite charity – and the best part is the giving doesn’t cost you one additional cent. As a matter of fact, it might actually save you money. Such a card even carries your charity’s logo and a full color photo advertising your organization’s main theme.
These bank credit cards are affinity cards, and they’re one of the hottest items in credit card collecting today. They’re MasterCards and Visas sponsored by non-profit organizations that are aimed at their members.
Convenient means of helping charities
The importance of an affinity card is it allows an individual to painlessly help their favorite non-profit organization financially. It also helps the organization tap other sources of income without touching its members’ pocketbooks.
Cash-strapped non-profit organizations are rushing to issue affinity credit cards. The card’s terms vary, but basically an organization receives about $1.00 for every member who gets the card. The group also gets one-half of one percent of each member’s sales transactions. Sometimes a group receives a fixed sum per transaction instead of a percentage. In either case, affinity credit cards are a convenient way for people to financially support their favorite group.
A means of reducing interest charge
Members come out ahead by using their group’s credit card instead of a standard card. An affinity card can mean a reduction of one-half of one percent or more in interest charged. Some plans allow the cardholders to not pay an annual fee the first year and then a reduced annual fee after that. It’s up to the organization to negotiate the best deal possible for its members.
Banks have an immense interest in getting affinity credit cards to organizations’ members. With consumer debt and personal bankruptcies at all time highs, bank credit card operations are getting tougher to keep profitable. The new tax law which slowly eliminates the interest deduction on credit card interest is also hurting the banks. Banks are having to be more responsive to consumers’ needs in order to gain cardholders .
Banks are entranced with the potential of affinity credit cards. An affinity card encourages the group’s membership to switch credit cards. When the bank sends the offer to the group’s members the response rate is phenomenal as opposed to a regular mailing. This allows the bank to get a large number of new credit card customers who tend to be bigger spenders. The new cardholders are also better credit risks. Affinity credit cards allow a bank to acquire a select group of customers.
The prestige and exclusivity of affinity credit cards
Banks are able to make affinity credit cards prestigious since they can only be acquired by a select few. This is what makes an affinity MasterCard and Visa more exclusive than a Diners Club or American Express.
Affinity cards are a bonanza for organizations. An environmental group, the Sierra Club, offered a Visa to its roster of 374,000 members and had over 20,000 takers. The card is now one year old and has generated $300,000 in revenue for the club.
Penn State in University Park, PA allowed Mellon Bank to offer a card to its 102,000 member alumni association for a share in the revenue. Now, tens of thousands of alumni are cardholders.
A win-win situation for parties involved
The concept of affinity credit cards is simple. The member gets a better deal on a card that carries the logo of his favorite group. The group gets a cut of the bank’s revenue from the card. The bank is able to acquire new, profitable customers at a low cost. It’s a win-win situation for everyone involved.
Why use a credit card that only gives revenue to a bank? Instead, put money in the pocket of your favorite non-profit organization by using an affinity credit card.
Copyright 1987 by Greg Tunks
