Investor's wiki

Affinity Card

Affinity Card

What Is an Affinity Card?

An affinity card is a type of credit card issued by a bank and, most frequently, a charitable organization whose logo shows up on the card. Each time the cardholder utilizes the credit card to make a purchase, a percentage of the transaction amount is given to the charity by the bank. Different types of organizations โ€”, for example, sports groups, professional associations, universities, and graduated class associations โ€” can likewise have affinity cards.

Otherwise called charity credit cards, affinity cards offer individuals a simple method for showing their support for a most loved nonprofit while benefitting the organization monetarily simultaneously. The cardholder brings about no extra expense on the grounds that the bank pays for the donation. Banks benefit from offering affinity cards in light of the fact that the partnership with the charity or organization grows their market, makes goodwill with their customers, and can lead to the [cross-selling](/strategically pitch) of extra products and services.

How Affinity Cards Work

Banks that issue affinity cards might offer a selection of nonprofit organizations the cardholder can decide to support. Organizations could contact their individuals or givers to illuminate them that affinity cards are accessible as a method for enlarging their support and participation. This could incorporate fraternal organizations, nonprofit games clubs, and scholarly groups.

For example, alumni of a university may be offered an affinity card for their separate graduated class association. The organization could indicate how it means to utilize the nominal donations that are collected from each purchase. A nature-situated organization, for instance, may pledge to plant another tree every year the card stays active.

An affinity card is a type of co-branded credit card. Co-branded credit cards are issued by a bank and a business (like a retailer or airline) and offer the cardholder personal benefits that could incorporate discounts, cashback, and reward points.

Benefits of Affinity Cards

Organizations might find affinity cards appealing as they offer a method for fostering a passive revenue stream, however the overall funding it generates might be small. Given the limited scope and amount of money that affinity cards can accrue for organizations, this is a helper means of supporting its operations. Ordinarily, affinity cards no affect merchants when they are utilized to make purchases. The fees and donations ordinarily don't reduce the payment made in the transaction.

New information exchanges for affinity cards might give the organization a one-time, level rate payment that could be $1 or more notwithstanding the small percentage gave each time a purchase is made.

However the benefits offered through affinity cards probably won't be equivalent to different programs, the cardholder could receive cash back instead of points while making purchases with the card. For certain cardholders, the opportunity to personalize a credit card with a logo from a reason or group they support is an incentive all by itself.

Special Considerations

In spite of the fact that affinity cards might appear to be a collective win for the bank, organization, and cardholder, there are negatives too. Affinity cards sometimes offer less advantages, (for example, warranty coverage) compared to other credit cards. They sometimes charge higher fees, and the amount gave to the charity (which isn't charge deductible to the cardholder) is tiny โ€” frequently around .05%. In any case, affinity cards are famous with consumers who like giving as they spend.

Instances of Affinity Cards

The Bank of Montreal offers an extensive variety of affinity credit cards. Account-holders can browse cards that support animal welfare, expressions and culture, conservation, education, medical research, and different other nonprofit categories.

For instance, each time a purchase is made utilizing the British Columbia SPCA Mastercard, the SPCA receives a donation (at no cost to the cardholder) to safeguard and care for animals. The donation goes toward giving care and adoption services to destitute animals and restoring harmed natural life. As an additional incentive, credit cardholders receive cashback on purchases, bonus airline miles, and travel discounts.

Bank of America issues the Susan G. Komen Cash Rewards Visa credit card. This affinity card assists fight with breasting disease by giving $3 for each new account and 0.08% of all retail purchases to the Susan G. Komen Foundation. Cardholders receive a card branded with the foundation's notable pink-lace logo, alongside a low early on annual percentage rate (APR), a basic cash bonus offer, and cash back on purchases.

Features

  • Cardholders might receive extra benefits from their affinity card โ€”, for example, a low basic interest rate, cash back on purchases, or bonus airline miles.
  • Affinity card programs appeal to nonprofits since they address a generally passive method for producing revenue.
  • An affinity card โ€” otherwise called a charity credit card โ€” is a credit card issued by a bank in partnership with an organization whose logo shows up on the card.
  • Ordinarily, neither the cardholder nor the merchant bring about any extra expense for participating in an affinity card program as the donation comes straightforwardly from the bank.
  • Each time the cardholder utilizes the affinity card to make a purchase, a percentage of the transaction amount is given to the charity or organization by the bank.