83% of American adults between 30 and 49 have at least one credit card. If you’re in this demographic, then chances are, you have one too.
Credit card holders are always looking for ones with the best rewards systems, but there are also some that enable you to give back to charitable organizations; these are called affinity credit cards.
If you’ve never heard of an affinity credit card, then keep reading. In this article, we explain what it is and what the benefits are.
What Is an Affinity Credit Card?
An affinity credit card is a credit card ties an organization (usually a nonprofit one) to a financial institution. The idea behind it is you’re making a donation to the organization of your choice with your purchases.
To differentiate themselves, affinity credit cards usually have a picture of the organization’s logo or name. That way, whenever you hand over your credit card to make a purchase, others see what you’re supporting.
How Does It Work?
There are two ways organizations can benefit from partnering with a financial institution. The first way is through a flat fee; whenever someone opens up a new affinity credit card, they get a certain amount of money.
The second way is through the credit card holders’ purchases. Each time they swipe their cards, the organizations get a certain percentage of the purchases.
For the organizations, they can benefit from one of the two ways, or both. Not only do they get a small stream of donations, but they also get more visibility and awareness of what they’re trying to achieve.
What Are the Benefits for You?
The main benefit is you get to show your support for causes close to your heart. Since your credit card is personalized with the logo or name of the organization, it can be a more pleasant card to look at when you’re making purchases.
While the rewards may not be as great as traditional credit cards, many still offer things like cashback, so you’ll still earn a little back. So not only can you make a small donation every time you swipe, but you’ll earn some cash back as well.
Some Things to Consider
Not only are there fewer rewards, but affinity credit cards usually have higher interest rates as well. If you do sign up for a card, make sure to pay off your balance on time to avoid paying that rate.
Some also don’t offer warranty coverage or other perks, so if these things are important to you, make sure to read the terms and conditions before you apply for a card.
Consider Signing up for One
While an affinity credit card may have fewer benefits than a traditional one, you’ll get the satisfaction of knowing that with each swipe, you’re helping out an organization you support. So if you want to help make a difference, consider signing up for an affinity credit card.
For more information about credit cards, please check out our learning center.