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The new Chase AARP Visa kicked up its rewards program considerably, offering 3% back on travel and 5% on purchases made in the first six months of holding the card. The revamped card also features a 0% intro APR on purchases and balance transfers in the first year.
Now, in honor of Older Americans Month, Chase will also up its philanthropy efforts by supporting the Drive to End Hunger, an effort spearheaded by the AARP to end senior hunger. In 2011 and 2012, the bank will donate $0.03 for every purchase made with the AARP credit card, plus $1 for every new account opened, up to $2 million a year.
Chase encourages philanthropy in its cardholders
Chase has actively promoted charity in its credit cards. In addition to the AARP initiative, Chase enabled its Sapphire, Ink and Freedom customers to donate their Ultimate Rewards points to the Red Cross in Japan. JPMorgan Chase also donated $5 million of its own cash to help in the recovery.
To encourage cardholders to give generously at year end, Chase is offering bonus charity rewards on the Chase Freedom. The card normally offers 5% bonus cash back on quarterly rotating categories, on top of its base 1% rate. From October through December, Chase is including charitable donations among the bonus categories.
Should you sign up for a credit card to help others?
Despite the 3% back on travel and a 1% base rate users can earn with the AARP credit card, this probably shouldn’t be the first choice for most seniors. The 1% base – 3% bonus is fine, but many cards offer 2% back, or 5% in bonus categories beyond six months. Older Americans and retired individuals will have a lifelong credit file, and many will therefore have stellar credit scores, allowing them many better options.
For example, a number of credit cards offer the same 1% back, plus 5% on rotating categories (Chase’s own Freedom comes to mind), while others such as the Capital One Venture give a flat 2% back. The card touts an ability to pay AARP dues or make donations with rewards earned – but you can easily do the same with cash back earned on other cards.
The standout feature of the AARP credit card is the slew of benefits given in the first 6-12 months. Not only does the card have no purchase and balance transfer APR for the first year, it also pays 5% back in rewards on anything you buy in the first six months. Therefore, it’s a fantastic card to transfer debt from another card, and make a ton of big purchases that you can pay off over time interest-free (with rewards). However, this spring chicken quickly loses its value. After 6 months, the rewards rate becomes mediocre, and after 12, the interest rate jumps.
While we applaud Chase’s efforts, we don’t think this credit card is in the best interests of most seniors. Older Americans will be better off skipping this credit card, and making their own personal contributions to the fight against hunger.