What Is an Affinity Card?

An affinity card is a type of credit card issued by a bank and, most often, a charitable organization whose logo appears on the card. Each time the cardholder uses the credit card to make a purchase, a percentage of the transaction amount is donated to the charity by the bank. Other types of organizations—such as sports teams, professional associations, universities, and alumni associations—can also have affinity cards.

Also known as charity credit cards, affinity cards offer people an easy way to show their support for a favorite nonprofit while benefitting the organization financially at the same time. The cardholder does not incur any additional expense because the bank pays for the donation. Banks benefit from offering affinity cards because the partnership with the charity or organization helps expand their market, creates goodwill with their customers, and can lead to the cross-selling of additional products and services.

Key Takeaways

  • An affinity card—also known as a charity credit card—is a credit card issued by a bank in partnership with an organization whose logo appears on the card.
  • Each time the cardholder uses the affinity card to make a purchase, a percentage of the transaction amount is donated to the charity or organization by the bank.
  • Affinity card programs appeal to nonprofits because they represent a relatively passive way to generate revenue.
  • Typically, neither the cardholder nor the merchant incur any additional expense for participating in an affinity card program as the donation comes directly from the bank.
  • Cardholders may receive additional benefits from their affinity card—such as a low introductory interest rate, cash back on purchases, or bonus airline miles.

How Affinity Cards Work

Banks that issue affinity cards may offer a selection of nonprofit organizations the cardholder can choose to support. Organizations might reach out to their members or donors to inform them that affinity cards are available as a way to augment their support and participation. This could include fraternal organizations, nonprofit sports clubs, and academic groups.

For instance, graduates of a university might be offered an affinity card for their respective alumni association. The organization might specify how it intends to use the nominal donations that are collected from each purchase. A nature-oriented organization, for example, may pledge to plant a new tree each year the card remains active.

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

Benefits of Affinity Cards

Organizations may find affinity cards appealing as they offer a way to develop a passive revenue stream, though the overall funding it generates may be small. Given the limited scope and amount of money that affinity cards can accrue for organizations, this is an auxiliary means of supporting its operations. Typically, affinity cards have no impact on merchants when they are used to make purchases. The fees and donations usually do not reduce the payment made in the transaction.

New signups for affinity cards may give the organization a one-time, flat-rate payment that could be $1 or more in addition to the small percentage donated every time a purchase is made.

Though the benefits offered through affinity cards might not be equal to other programs, the cardholder could receive cash back rather than points when making purchases with the card. For some cardholders, the opportunity to personalize a credit card with a logo from a cause or group they support is an incentive in and of itself.

Special Considerations

Although affinity cards may seem like a collective win for the bank, organization, and cardholder, there are negatives as well. Affinity cards sometimes offer fewer perks (such as warranty coverage) compared to other credit cards. They sometimes charge higher fees, and the amount donated to the charity (which is not tax-deductible 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.

Examples of Affinity Cards

The Bank of Montreal offers a wide range of affinity credit cards. Account-holders can choose from cards that support animal welfare, arts and culture, conservation, education, medical research, and a variety of other nonprofit categories.

For example, each time a purchase is made using the British Columbia SPCA Mastercard, the SPCA receives a donation (at no cost to the cardholder) to protect and care for animals. The donation goes toward providing care and adoption services for homeless animals and rehabilitating injured wildlife. As an added 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 helps fight breast cancer by donating $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 well-known pink-ribbon logo, along with a low introductory annual percentage rate (APR), an introductory cash bonus offer, and cash back on purchases.