Cash Out to Charity

Credit card rewards programs can be tricky things. Sure, they look good on paper— earn cash back! Get more miles!— but how often do you really stay on top of them? If your answer was “not very often”, you’re not alone. A good deal of us aren’t. In fact, $16 billion in rewards went unused back in 2010. Those numbers may have changed in the half decade that has followed, but even if it were a minor improvement of 10-20%, that’s still a solid chunk of change that’s gone to waste.

One credit card company though, is looking to change that by allowing card holders to donate unused rewards to charity.

Rewards go unused for a number of reasons. If there’s a reward you can get by redeeming points, often times you need to have spent a lot in the process. After all, no one is thrilled by redeeming their paltry earnings for something like a keychain. For other users, especially those with a smaller credit line, the thought of redeeming points to shave a few dollars off of the bill also may not be at the front of the mind. The point is, a model like the one used by Charity Charge ensures that what would be otherwise gone and forgotten is donated to useful causes.

Charity Charge isn’t the first company to forward rewards to charities, but it is redefining how we give. Bank of America, for instance, offers a card that donates cash back rewards to breast cancer research, but the amount itself is tiny— .08% of each purchase. Another snag with donating to charity is the total of processing fees. Many donations go towards salary, utilities, and other overhead costs. But charity charge underwrites these fees, so the donations go straight to the cause itself.