Charities can benefit from your credit card spending

When asked, most people will happily give a donation to a charity. Some people will give their donation to a street collector armed with a collection tin, while some will donate to a sponsored event being undertaken by a friend or work colleague. Other people will donate via a direct debit from their bank account and others still will buy products that promise a proportion to any number of charities. However, there is a method that allows people to spend and donate money at the same time: a charity credit card.

Many people when considering a credit card will normally choose a generic card offered by their bank or credit card provider. However, charity credit cards are a simple hassle-free way of supporting your favourite charity at no extra cost, simply by carrying on with your normal, everyday spending. Furthermore, opting for a charity credit card doesn’t mean you need forego a lower rate or lose out on preferential balance transfers.

Charity credit cards work by paying a small donation to a charity for each approved application, plus a percentage of any spend made using the card in the future. Initial donations for approved applications typically vary between £10-£20, with further donations usually between 0.25% and 0.5%. There are numerous charity credit cards in circulation, so the likelihood is you'll be able to find a credit card that supports your favourite charity.

The Co-operative Bank recently launched a credit card which supports homeless charity, Shelter while charities such as British Heart Foundation, World Wildlife Fund, Childline and Breakthrough Breast Cancer can all be supported through credit cards provided by American credit card issuer MBNA, who also operates a large number of charity cards and other affinity credit cards. Other charity credit cards include American Express' Red credit card which helps to fight the HIV/AIDS emergency in Africa, Beneficial Bank's RSPCA card which helps vulnerable domestic animals and Cancer Research UK, which is issued by Halifax and funds research into various forms of cancer.

However some financial analysts believe that charity credit cards might sway individuals away from better deals elsewhere, claiming that a lower rate card could leave cardholders with more money from which they could donate. Charity campaigners argue that money saved is unlikely to be seen by charities, however, and while many others are grateful for donations received through charity credit cards - however small they may be.

When choosing your next credit card, why not find out if your favourite charity could benefit from your spending? But whether or not you decide to apply for a charity credit card, there are several online resources that can help compare credit cards - both affinity and generic - allowing you to make an informed decision about the card that best suits your needs.

Andrew Regan is a freelance online journalist