DEFINITION of 'Affinity Card'

An affinity card is 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 collective win for the bank, organization and cardholder, there are negatives as well. Affinity cards offer fewer of the perks (such as warranty coverage) other cards do; 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.

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.

Ways Affinity Cards Benefit the Groups That Offer Them

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.

Banks that issue affinity cards may offer a selection of organizations the cardholder can choose 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.

New signups for affinity cards may give the organization a onetime, 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.

  1. Cash Card

    A cash card is any electronic payment card that stores cash for ...
  2. Charge Card

    A charge card is a type of electronic payment card that charges ...
  3. Credit Card Funding

    Credit card funding is the use of a credit card account to provide ...
  4. Affinity Fraud

    An affinity fraud is an investment scam in which a con artist ...
  5. Carding Forum

    A carding forum is an illegal website dedicated to the sharing ...
  6. Credit Card Authorized User

    A credit card authorized user is a person who has permission ...
Related Articles
  1. Personal Finance

    Purchases You Should Always Make With A Credit Card

    Credit cards aren't always bad possessions to have. There are certain perks associated with using credit cards as we make routine or irregular purchases.
  2. Personal Finance

    Credit, Debit and Charge: Sizing Up the Cards in Your Wallet

    Not all plastic is equal! Learn the difference among the three kinds, and how each can affect your finances.
  3. Tech

    Top Credit Cards For Airline Miles

    Which companies offer the best credit cards for airline miles travel? Two resources to examine closely.
  4. Personal Finance

    10 Considerations For Using Your Credit Card Abroad

    Credit cards can be the best item you pack when traveling, just make sure that you are taking the right card that suits your needs.
  5. Personal Finance

    Review: Discover Credit Cards

    Discover "it" cards still offer generous rewards and no annual fee. But how generous depends on which card you end up with, and what your credit score is.
  6. Personal Finance

    Top 5 Ways To Make Your Credit Card Work For You

    The best investors know that either they work for their money or their money works for them.
  7. Personal Finance

    10 Reasons To Use Your Credit Card

    There's a surprising credit card strategy you should employ as a consumer ... use your card for everything (or almost).
  8. Personal Finance

    How to Find the Right Prepaid Debit Card

    Prepaid debit cards have become very popular. Here are some tips for choosing the right one for your needs.
  1. Can the Best Buy credit card be used anywhere?

    Learn how the Best Buy credit card can only be used in Best Buy stores and online to make purchases through the Best Buy ... Read Answer >>
  2. Debit card versus credit card

    Can't figure out which card to use when making a purchase decision? Here is everything you need to know about the differences ... Read Answer >>
  3. Can I use a prepaid credit card to pay bills or transfer money to other accounts?

    Learn how prepaid credit cards enable convenient bill payments and transfers. Explore different fees charged for such transactions. Read Answer >>
Trading Center