What’s the deal?
The Virgin Charity Credit Card gives you the opportunity to donate 0.8% to a charity of your choice with every purchase you make with the card. This 0.8% donation can be increased to 1% if you choose for Gift Aid to be claimed on your donation.
The Virgin Charity Card is the first credit card of its kind to offer the Gift Aid option. Gift Aid is where charities will take your donation – which effectively is money that you have already paid tax on – and they will reclaim the basic rate tax from HM Revenue & Customs. For example, if you donate £10 using Gift Aid, this amount will be worth £12.50 to the charity and for donations made from now until 5th April 2011 the chosen charity will receive a further 3p on every pound spent.
Virgin’s Charity Card works in a similar way to a cashback credit card but, rather than the money accrued being credited back to you, it is credited to a Virgin Money Giving account (this will be opened when your credit card application is processed, if you don’t already have one). You can then decide which charity you would like the money to go to. You can only give to one cause at a time but you have 21 days from your monthly statement date to change your chosen charity.
If you don’t pay your balance off in full each month you’ll be charged an annual percentage rate (APR) of 12.9% on any purchases you have made.
Balance transfers attract a lower APR of 8.9%. This applies until that debt has been cleared, although the money must be transferred in the first 60 days of the account being opened and there will be a 2% transfer fee. You’ll be charged 18.6% on a balance transfer made after the first 60 days.
You can also make a money transfer (where funds are paid into your current account from the credit you have available on your card) or pay for something with a credit card cheque. If done within the first 60 days, the APR is 8.9% until that debt is cleared. Money transfers attract a fee of 4% while there is a 2.98% fee for cheque transactions.
If you use your card to withdraw cash from an ATM, the rate is significantly higher at 27.9%.
Although the credit card is branded Virgin Money, MBNA is actually the card issuer and you cannot transfer balances over from other MBNA cards.
There is no interest-free period with this product so you should aim to pay your balance off in full each month otherwise you will be charged interest.
And be aware that if you transfer a balance onto the card and use it for spending on, the repayment system Virgin uses means that the cheapest debt is cleared first, leaving you accruing interest at the highest rate.
If you use a credit card regularly but your existing card doesn’t give you anything back (such as cashback or reward points) then why not go for a card that enables you to raise money for your favourite charity each time you spend on it?
Of course there are other ways to give to charity – you could set up a standing order and make a donation every month and your chosen charity can still benefit from Gift Aid. And if you don’t pay your credit card off in full each month you’d be better off doing this and opting for a credit card that offers an interest-free period or lower standard rate of interest.
For those that do clear their balance each month, the Virgin Credit Card is well worth considering. You can apply for the card directly through moneysupermarket.com, which makes no money for any applications made through the site for this card.
If you keep meaning to do more for charity but never get round to it, then a charity credit card is a great option as it means you effectively give a little each month. And if you can afford to give more, why not set up a standing order so that money is automatically transferred from your current account on a monthly basis.
If you’re a taxpayer, don’t forget to tick the Gift Aid box whenever you sponsor someone or make a charitable donation. It boosts the amount charities earn from the generosity of individuals by around £1billion each year - so that small ‘tick’ can makes a considerable difference.