What is an Affinity Credit Card

by Vanessa Diem

What is an affinity credit card

First, let’s understand what Affinity Credit Card is. An affinity credit card is a type of card which is issued by a charitable trust or some other organization. The logo of the organization is printed on the Affinity Credit Card. Many of these credit cards are also given by the sports team. In simple words, the credit card issuer or bank have teamed up with a specific organization. Thus, the organization can issue their credit cards.

Many people choose these Affinity Credit Cards to show their support to a team or organization. The partnership between the organization and issuer helps in increasing the reach of credit cards. More and more credit card users start using these credit cards. A small percentage of every transaction is donated to the team or organization. Thus, it is indirectly helping both the issuer and the organization.

Non-profit organizations, sports teams, schools, and colleges often issue their own Affinity Credit Card. The name of the college or the organization is written on every affinity credit card. One of the most famous affinity credit cards is Susan G. Komen Credit card issued by Bank of America. It has a pink ribbon engraved on the credit card. This pink ribbon is used to increase the awareness towards breast cancer. Also, some amount of every transaction is donated towards the breast cancer charity. You can see this nice credit card in action here.

How a Affinity Credit Card Works

How a Affinity Credit Card Works
How a Affinity Credit Card Works

Affinity credit cards help in increasing the brand value of any organization. It helps in building loyalty with the organization fans. Thus, it helps in generating the revenue also. Many organizations use it as a tool to promote their message in society. Whether your money will be donated to charity or not will depend on the agreement between the organization and the bank.

For example, Florida College has also created its own affinity credit card. They distribute this credit card to their alumni network and students. According to their agreement, they receive a total of 1% of the transactions which are done by their affinity credit card. This fund is used to pay for student scholarships.

You need to check the affinity credit card agreement before getting any card. There is no need to get a credit card if the bank is not paying anything back to the organization. Most banks already earn more than 3% in processing fees on every purchase. Thus, they must donate extra money to the non-profit organization. You must make sure that the bank or issuer is actually benefitting the non-profit organization.

Features of Affinity Credit Cards

Affinity Credit Card is similar to other credit cards. You have a credit limit which is set by your issuer or bank. The credit limit depends on your credit history and credit score. You can do purchases using your credit card. It acts like a little loan. But, you need to pay back the bill by the month end. If you are not able to pay back the bill, then banks will also add some interest in your bill. To increase your credit score, you must pay all your bills on time. This will help in improving your credit history also. A good credit history plays an important role in getting loans from the bank.

The affinity credit card works similarly. You can do online or offline payments using your affinity credit card. But, you need to pay your bill in the month end. There are many factors which you must consider before selecting an affinity credit card. Some of the factors are:

• What is the annual fee?

• What is the interest rate?

• What rewards you will get?

• Will you get charged extra for the foreign transaction?

• Will you get charged extra for online transactions?

Features of Affinity Credit Cards
Features of Affinity Credit Cards

After considering these factors, you must also check how much your organization will receive. If your organization won’t receive anything, then there is no need to get an affinity credit card. Also, make sure that there are no hidden costs associated with an affinity credit card. Many banks add extra costs to give money to organizations. A good deal for your organization may be a bad deal for you. Thus, pay extra caution while getting an affinity credit card.

Most Affinity credit cards have very high interest rates. Thus, make sure that you are paying your credit bill on time. Otherwise, you need to pay extra interest money to banks. Also, your credit history and credit score will improve if you are doing on-time payments. You can also earn various credit card rewards by paying your bill on time.

Many Affinity credit cards offer rewards to their cardholders. These rewards are given to increase the user base of an affinity credit card. These rewards won’t be able to compete with regular credit card rewards. But, still, something is better than nothing. There are many affinity credit cards which offer free signup bonus to their users. You can receive a good amount of signup bonus on various affinity credit cards. Also, the interest rate is very low in the starting month. But, the interest rate will definitely increase with time.

An affinity credit card is not the only way to charity

An affinity credit card is not the only way to support your organization. You can also directly donate to your favorite team or organization. In most cases, a direct donation creates more impact on any non-profit organization. They will receive the full donation without any commission cut by the banks. You may also get a tax deduction, as you are donating a non-profit charity. This is not possible if you are using an affinity credit card.

Risks with Affinity Credit Cards

There are some risks associated with an affinity credit card. If the agreement between the organization and the bank gets broken, then your credit card will also get canceled. In such cases, you will lose all the rewards and credit card points. Also, you won’t be able to make any new purchases using that credit card. You need to apply for a new credit card.

About Vanessa Diem

Vanessa Diem is a finance blogger who has gained widespread recognition for her insightful and informative content on personal finance, investing, and money management. With a keen understanding of the complexities of the financial world, Vanessa is dedicated to providing her readers with practical advice and strategies to enhance their financial well-being.

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