Tis' the season to be charitable! But be careful because some charities now want you to charge it. The Salvation Army, which is known worldwide for its red kettles, is now testing out kettles that will accept credit cards.
Last year Salvation Army tested the credit machines in two cities, Dallas and Colorado Springs. This year the plastic kettles will be tested in more than 120 cities. In Colorado Springs, fundraising last year went up $64,000 from the year before, an 11 percent increase. About $5,000 of the increase was from donors using credit or debit cards at the kettles. Anecdotal evidence indicates people who stop to make credit or debit donations make larger gifts, at least a few dollars.
But I say skip the plastic and bring cash instead. Here's why:
- While giving to charity is important and noble, even charitable giving should be budgeted. When you choose to use a credit card for donations, you may end up giving too much. And what is too much? You know you've given too much when you "need" to charge it to you credit card and then you "need" to take a few months to pay it back.
- You can't write that credit card charge off your taxes completely. Yes, donations are tax deductible; but not the interest that you pay on your credit card. If you give $1000 to charity via your credit card, while you can write off the $1000 on your taxes you cannot write off the credit card interest.
- The charity is charged fees by the credit card company. When a charity takes donations via credit card some of your money will inevitably go back to the credit card company via fees to the charity. Take it easy on both the charity and you, pay cash.