DEFINITION of 'Affinity Card'

A type of credit card issued by a bank and a charitable organization whose logo appears on the card. Each time the card is used, a percentage of the transaction is donated to the organization.

BREAKING DOWN 'Affinity Card'

Although affinity cards may seem like a win-win-win for the bank, organization and cardholder, there are negatives as well. Affinity cards offer fewer of the perks (like warranty coverage) other cards do; they sometimes charge higher fees, and the amount donated to the charity (which is not tax deducible to the cardholder) is very small, often about .05%. Nevertheless, affinity cards are popular with consumers who like the idea of giving as they spend.

Note that affinity cards are distinguished from co-branded credit cards, which are issued by the bank and a business (e.g., retailer, airline) and offer personal benefits (e.g., discounts, points) to the cardholder.

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