If your philosophy is that it's better to give than to receive, you may want to use credit card rewards to make a donation to a charity. The Charity Charge World Mastercard® Credit Card makes giving easy, but its low rewards rate means you won't give very much.
The $0-annual-fee card, issued by Commerce Bank, has a set-it-and-forget-it way of easily and automatically donating credit card rewards to the charity of your choosing — no separate checks to write.
But it passes along too little to the charities, compared with what you could donate if you contributed rewards earned on other cash-back cards. You’re essentially letting the card issuer keep a huge chunk of money that could otherwise go to your cause. For that reason, it’s a poor choice for most people.
Here are five things to know about the Charity Charge World Mastercard® Credit Card.
1. Giving is easy...
The Charity Charge World Mastercard® Credit Card specializes in convenience, not value.
After you set up the charity to receive the rewards money earned on the card, you have no further hassles of writing checks or otherwise exerting effort to make a donation. You also can use the card's donation dashboard to track where your earnings are going and get a big-picture view of your impact over time. If you’re the type of person who wants to give but never gets around to actually making a donation, this might be a useful feature.
» MORE: Reward donations: How they work
2. ...and flexible
Unlike some charity credit cards, this one isn't locked into a specific charity. The card lets you choose your donation recipients from among 501(c)(3) organizations, K-12 schools, colleges or religious organizations. You can fund up to three different nonprofits at the same time and change your designated recipients whenever you like.
3. But it pays a lousy 1% cash back
While the Charity Charge World Mastercard® Credit Card automatically donates rewards you earn to the causes you select, it earns only 1% cash back on all purchases. That's a terrible rewards rate.
Many flat-rate cash-back credit cards earn 1.5% or even 2% cash back or more. Those percentages might not sound like much, but using a different card could double your donation if you used rewards cash to make a separate donation to the same charity. If you spend $15,000 annually on the card, that’s the difference between donating $150 or $300 per year.
An added insult: This card has no sign-up bonus.
4. Donations are tax-deductible, but that won't matter for most
Rewards donated through the Charity Charge World Mastercard® Credit Card are deductible as a charitable donation, which isn't typically the case for donated credit card rewards. But all in all, tax-deductibility is a minor potential benefit.
It only matters if you itemize your tax return and don’t take the standard deduction, which in recent years has been raised and is used by more taxpayers. Instead, if you used a cash-back credit card for rewards and made a separate cash donation, that would also be deductible.
5. It comes with solid benefits
Although the Charity Charge World Mastercard® Credit Card doesn't offer much in the way of core value, it comes with good ancillary benefits. Because it's a World Mastercard, it comes with shopping benefits like price protection on eligible items — a benefit many cards no longer offer — and extended warranties on qualifying items purchased with the card. You'll also get travel and lifestyle extras including special discounts and access to travel and concierge services, among other benefits.
Should you get the Charity Charge World Mastercard® Credit Card?
Probably not. Its terrible rewards rate just isn’t worth the convenience for most people. Literally any decent cash-back card will earn far more money, which can be used to make a larger, separate charitable donation.