Charity Charge World Mastercard Review: Will Its Cash Rewards Help You Make a Difference?
The Charity Charge World Mastercard is a rewards credit card that sends your credit card rewards up to three charities you choose from a selection of every single registered nonprofit in the country.
The card, which is offered through Commerce Bank, is unique because it’s the only credit card we’ve reviewed whose rewards go toward charities in lieu of the cardholder’s rewards account.
We spoke with Charity Charge Founder and CEO Stephen Garten about the origins of his company. He told us he started it as a way for consumers to give their credit card rewards to someone else rather than spending those rewards on themselves.
“If you’re fortunate to be able to use a credit card to buy a cup of coffee or fill your car up with gas, why not do it? Add a card to your wallet that allows you to make a difference at no cost to you,” Garten said. “One of the things I'm hoping to do with this company is having a conversation about that, and, ultimately, remind people of something my parents taught me: giving is better than receiving.”
Yet, while the card is perhaps the most altruistic one we’ve come across, it doesn’t excuse it from undergoing analysis for its rewards, its benefits, and its rates and fees. We’re also going to compare the card to other rewards cards whose cash bonuses you could send to charities.
At the end of the review, we’ll give you our thoughts on the pros and cons of the card, and if we think it’s the best fit for using credit card rewards for giving.
The Charity Charge World Mastercard’s Rewards
Every rewards credit card has some sort of rewards rate that leads to a rewards balance that cardholders can redeem for cash or transfer to hotel and airline loyalty programs.
The Charity Charge card has a 1% rewards rate, which means you’ll earn 1% in cash rewards for every purchase you make. Now, keep in mind that there are certain purchases that don’t qualify for the rewards rate:
- Balance transfers
- Interest payments
- Late fees
- Cash advance fees
As you use your card to spend, your rewards balance will slowly creep up. Each week, your cash rewards are sent directly to Network for Good, “one of the largest and most respected donation processors in the country,” Garten said.
When you sign up for the card, Charity Charge will ask you to pick one nonprofit. If you’re accepted for the card, then Charity Charge will send you an email notifying you that you got the card and they’ll include a link that allows you to log into your Charity Charge account. At that point, you can choose up to three of the more than 2 million charities in the United States.
According to Garten, your Charity Charge’s Donation Dashboard (account page) will show you how much you’ve donated to the various charities of your choice. The donations are sent out once a quarter to the charities because, Garten said, it’s easier for a charity to get one large lump sum rather than a bunch of small transactions.
And, he said, the key to Charity Charge’s donation process is that they cover the transaction fees that credit cards charge when your rewards balance is sent to a charity. Those fees, he said, usually cost between 2.5% and 7.5%.
“We underwrite 100% of the donation processing fees so that there’s no cost or gotchas. If you donate $100, your nonprofit is going to get $100, guaranteed,” Garten said.
So, if you were to donate $100 to the Red Cross via a normal credit or debit card, between $2.50 and $7.50 is going to the credit card company processing the payment and the rest goes to the nonprofit. However, if you use your Charity Charge rewards, the nonprofit gets the full $100.
The Charity Charge World Mastercard’s Benefits
In addition to the 1% rewards rate this card offers, you get a series of benefits that come free of charge by virtue of the card being in the World Mastercard network. Those benefits are as follows:
- Extended warranty
- Price protection
- Hotel perks
The extended warranty benefit on this card is one that not many people know about but could be a useful perk. According to the benefits guide for the World Mastercard program, the extended warranty doubles the manufacturer’s warranty up to 24 months for anything you buy with your Charity Charge card.
The price protection program covers you if something you buy with your card goes down in price within 120 days of the purchase date.
Each of these programs comes with their own series of limitations and restrictions, so make sure you read the Guide to Benefits that comes with your Charity Charge.
The Charity Charge World Mastercard’s Rates and Fees
Rewards credit cards are popular because of the potential they have to earn you free cash or travel. However, what often is absent in discussions about rewards credit cards is how much they can cost you as a result of their rates and fees.
Therefore, it’s always wise to take a look at a card’s APR and late fees to ensure you know what you’re getting yourself into if you make a late payment or carry a balance.
Here are the Charity Charge’s rates and fees:
- APR for purchases and balance transfers: 11.99% to 21.99%
- Cash advance APR: 26.99%
- Penalty APR: 28.99%
- Balance transfer/cash advance fee: 5%
- Late fee: Up to $37
Based on our research of more than 100 credit cards, we believe the lowest APR you get with this card, 11.99% is an excellent APR and better than every cash back credit card we ranked in our Best Cash Back Credit Card of 2018 guide.
The card has a penalty APR that kicks in if you are more than 60 days late on your credit card payment. The 28.99% interest rate will remain on your account until you can make six consecutive on-time payments.
The Charity Charge’s penalty APR is certainly one of the more generous ones we’ve seen. Most cards say their penalty APR will kick in the first time you make a late or returned payment and, in most cases, the APR is 29.99% and will stay on your account indefinitely.
How the Charity Charge World Mastercard Compares to the Leading Cash Rewards Cards
We have yet to review a card that’s similar to the Charity Charge, which is why we’re comparing it to cash back cards instead of other charity cards.
Assuming your household spends $25,000 a year on your credit card, then the Charity Charge will earn you $250. The Chase Freedom Unlimited will get you $375 and the Citi Double Cash will earn you $500.
Those two other cards earn you more cash back per year, but only if you’re someone who doesn’t carry a balance on your credit card. Why? Because if you carry a balance on the card – say, $3,000 at any given time – then APR becomes a huge factor.
Here’s an example of how much interest you’d pay on the three cards mentioned above over the course of one year using the card’s best APR for a balance of $3,000:
- Charity Charge: $359.70
- Chase Freedom Unlimited: $502.20
- Citi Double Cash: $457.24
With these interest payments now revealed, you should notice that interest can cost you more than what you earn in rewards.
But, in a comparative sense, the Charity Charge actually frees up more money for donations because the Chase Freedom Unlimited’s higher interest rate will cost you about $143 more than the Charity Charge, whereas you’ll earn only $125 more in cash rewards.
The Citi Double Cash’s interest payments will be about $98 more than the Charity Charge. When you subtract this from the advantage the card has in yearly cash rewards, the resulting number is $152 more than the Charity Charge.
Based on the numbers, the Double Cash would be a better card for raising cash for donations, but the key question is: Will you actually use your cash back rewards for a charitable donation?
We did some research to find out what part of America’s yearly charitable donations was from credit card rewards but could not find any hard data, so we can’t tell you exactly how many people actually put their rewards toward nonprofits.
However, it’s been our experience with financial products that consumers value convenience. There are dozens of budgeting apps to track spending, all kinds of apps to track mileage you drive for work and even apps that automatically scan your transactions and contest unwarranted bank charges.
So, Charity Charge seems to be an excellent, automated option for giving that removes all the barriers the average consumer might avoid when trying to convert credit card rewards into charitable donations.
Bottom Line on the Charity Charge World Mastercard
Charity Charge offers the advantage of convenience. Use your card, rack up rewards and Charity Charge does the rest. You don’t have to click on anything in order to make a donation. Everything is automatic.
So, while their yearly cash back isn’t as strong as a card like the Citi Double Cash, you never have to worry about remember to donate your cash or ever having to click on anything in order to make your contributions happen.
We also like how Charity Charges covers the cost of the donations you make, whereas using a credit card usually incurs fees of between 2.5% and 7.5%.
The downside to the Charity Charge is that it has a penalty APR but that negative isn’t as bad as it seems because Commerce Bank tempers the APR by using it only when you’re more than 60 days late on your payment.
In general, we believe this card is an excellent choice for consumers who want an easy, automated way to convert their credit card rewards into charitable donations.