Wednesday, Jan. 20
Posted: 11 a.m.
The largest payment networks -- Visa, MasterCard, American Express and Discover -- have each decided to waive payment processing fees on credit card donations tied to Haiti relief efforts.
The announcements came after The Huffington Post exposed the monster profits credit card companies make from disaster-related credit card donations. It charged that banks and credit card companies keep about 3 percent of the donation as a transaction fee, and make about $250 million per year off charitable donations.
Anytime a consumer makes a purchase on a credit card, a fee of about 1 percent to 3 percent of the purchase amount goes to pay card networks and the cardholder's bank for processing the credit card payment. In this case, it is charities that lose a portion of the proceeds.
Now, certain nonprofits will receive your a bigger chunk of your donation.
Here is what the major card networks are doing:
American Express: Will rebate the interchange fee on donations made with American Express cards to organizations listed on the USAID Web site that are involved in Haiti. The rebate applies through Feb. 28 and retroactively through Jan. 12.
Discover: Will waive transaction fees on donations made with Discover Card to the American Red Cross, AmeriCares, CARE USA, Direct Relief International, Doctors Without Borders, Habitat for Humanity, International Rescue Committee, Mercy Corps, Oxfam America, Save the Children and U.S. Fund for UNICEF. It also will match donations made with Cashback Bonus Dollars or Miles to the American Red Cross, up to a total of $1 million. The company has not yet set an expiration date for the match.
MasterCard: Will waive interchange fees on Haiti donations made on U.S.-issued MasterCard cards to the American Red Cross, AmeriCares, UNICEF, Save the Children, Doctors Without Borders, United Way and CARE USA.
Visa: Will donate any proceeds from charitable contributions for the Haiti disaster through the end of February to the American Red Cross. It will also waive interchange fees on Haiti relief donations made to certain U.S.-based charities: American Red Cross, AmeriCares, CARE USA, Direct Relief International, Habitat for Humanity, International Rescue Committee, Mercy Corps, Oxfam America, Save the Children, U.S. Fund for UNICEF and World Vision.
If you have a Capital One card, you can also use the No Hassle Giving Site to make a fee-free donation to a nonprofit. The landing page highlights the charities involved in aid for Haiti.
Questions? Comments? E-mail plastic_rap@bankrate.com.
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