New Amex Red charity card

MSE_Martin

Amex is launching a new charity credit card which donates cash to HIV/AIDs programmes each time you use it. The charity receives 1% of your purchases' value on spending up to £5000 and 1.25% on amounts above this.

It’s a nice idea, but the charities could do much, much better. Below is press release I’ve sent out today, but remember it’s a press release so take it with a pinch of salt!

Anti-debt Bono shouldn’t put his name to a credit card with dirty tricks

New Amex Red: it’s a reasonable charity card but could do better

The following is the comment from Martin Lewis, creator of the Consumer Revenge website MoneySavingExpert.com on the new Amex Red charity card endorsed by Bono.

The Red card compared to other charity cards:

"Ditch your charity credit card has been my constant call. The reason’s simple: most charity cards donate only 0.25% of spending, yet the best cashback cards pay over 1%, which you can then donate via Gift Aid so the charity gets your tax back too. The Amex Red card for the first time pays a realistic amount to charity, yet it’s still beaten by Amex's own range of cards. For someone who wants to donate money, you'd be better off using its Blue or Platinum cards then donating via Gift Aid, this way the charity gets more. In fact, someone spending £15,000 a year can nearly double the amount they give (see notes to editors).

Dirty tricks and Bono:

“Plus, a couple of serious warnings. The golden rule is only get a charity card if you’re going to pay off in full each month, otherwise you’ll pay interest that’s much bigger than the charity donation and you’re better off just cutting down the interest rate. Much more sneakily, this card has a competitive offer for shifted debt. Do this at the same time as spending and Amex will make a fortune, as the card is set up to trap in expensive debts from spending if you do both.

“I'm slightly saddened that, as Bono, famous for campaigning against bad debts, put his name on this card, he didn't consider asking Amex to give more fair terms to consumers, most of whom won't understand the vagaries of 'credit card repayment priorities'. Even though this is a charity card, it’s still just as much a profitable shark for the credit card company as any other if used incorrectly."

Notes to editors:

1. Amex Red. Amex has announced the card today to be launched 1 March 2006. The card pays 1% on every £1 spent (and 1.25% above £5,000) to the Global Fund, which runs HIV/AIDs programmes. Amex donates £5 extra for any spend in the first month.

2. Gift Aid. When a charity card donates the money, this doesn't qualify for any tax relief. Yet if you donate the money earned from cashback, and tick the gift aid box (assuming you're a UK taxpayer), now the charity can claim back tax as if you'd donated the cash from your gross (before tax) earnings. This simply means for every £10 you donate they get £12.80.