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5 Things to Consider Before Using a Credit Card to Make a Donation

by Francine Huff

Credit card companies have agreed to waive interchange fees on donations to earthquake relief efforts in Haiti. Visa, MasterCard, American Express, Bank of America, and Discover said they would waive the fee, which may normally be 1% to 3% of the total amount charged.

Many Americans are opening their wallets to give to the relief efforts. But before you pull out your credit card to donate, here are five things to consider:

  1. Fees are only going to be waived for donations to certain agencies. Check with the credit card companies to see which groups qualify for having the fee waived.
  2. Using a credit card to donate is a smart option only if you have the money to pay your bill. Though your heart may be in the right place with wanting to give, it's not really a good idea to donate a large sum of money on a credit card when you can't afford it. Consider putting aside money out of each paycheck for several weeks if you really want to help. There should be plenty of opportunities to donate going forward because Haiti may likely need help for a long time to come.
  3. If you don't already have a budget for giving, run the numbers to see how much you can afford to give at this time. Use your discretionary income to make a donation, or take money out of your savings. Consider cutting back on certain purchases to save up enough money to give to charity. For example, consider giving up eating out for a month, going to the movie theater, or buying coffee every morning to find the funds.
  4. Pay attention to credit card rates when deciding to charge a donation. You're better off saving up your money over a couple of months than getting hit with a lot of interest payments because of impulsive giving. If you do charge a donation, use the credit card with the lowest interest rate.
  5. Do your homework when choosing a charity. Scams involving Haitian relief are already proliferating. Within 36 hours of the earthquake, 64 new URLs related to Haiti earthquake relief had been registered, according to ABC News. Ignore e-mails that ask you to donate money, and instead look for legitimate and well-established organizations to support. Be especially suspicious of solicitations that ask for donations via Western Union.

Donating money with credit cards can help get contributions to legitimate relief organizations quickly. Just make sure you've determined whether or not you can afford to give at this time.

Published 04/12/10 (Modified 06/27/14)

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