Can you use a credit card for political donations?
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With November’s midterm elections approaching, some voters are considering whether to donate to their favored political campaigns. You may even be wondering if you can use your credit card for this purpose.
Much as you use your credit card to pay for other goods and services, you can use it to pay for the political campaigns of your preferred candidates.
However, foreign nationals cannot make contributions to political campaigns for federal, state or local elections. If you are a U.S. green card holder, though, you are exempted from this law and can make contributions to U.S. political campaigns.
A campaign contribution is “a monetary payment made or non-monetary goods or services given to a candidate or committee for which you do not receive consideration of equal or greater value in return,” as defined by the city of Los Angeles. This includes payments made with a credit card.
Before you whip out your credit card to support your favorite candidate, you should weigh the pros and cons of using your credit card for such a purpose.
Cash in on rewards
One positive of credit cards is their convenience. You can use your credit card to pay for political campaigns wherever they are accepted. And if your credit card offers rewards, you will be able to cash in on those as well, while contributing to your favored candidate at the same time.
There are legal limits to how much you can contribute to political campaigns, though. For instance, as an individual, you can only contribute up to $2,900 per election to a candidate’s committee in 2022, according to the Federal Election Commission. Watch out for federal limits, as well as state and local limits. Your credit card statement can help you keep track of your contributions.
And if you think you can also benefit by getting a tax deduction on your contribution, you would be mistaken. The Internal Revenue Service does not allow tax deductions on your political contributions, even though you would get tax deductions on some other forms of giving.
Swipe fees will take a bite
Another drawback is that your candidate will not get the benefit of your entire contribution. That’s because every time you use your card to make a payment, there are swipe fees involved. These fees, which typically average 2 percent, go to the bank that issued your card, the merchant’s bank, the card network and the processor. This swipe fee will take a bite out of your contribution.
For instance, if you contribute $500 using a credit card, the campaign will likely only receive about $490 of this amount. Some campaigns might pass on this swipe fee to you by asking you to donate $510 when you want them to net $500.
Another thing to watch for is that the money is going to your preferred political campaign rather than to a scammer. Be wary of scammers pretending to represent a campaign. If someone calls you asking for a contribution, you should do your due diligence before providing the funding. Similarly, watch out for imposter websites.
Recurring payment scams
Also, be sure that you are making a one-time payment to your preferred candidate, rather than a recurring payment, if that’s not your aim. It is all too easy to use your credit card information to hit you for periodic recurring payments.
For instance, the Trump campaign became notorious for signing up donors to recurring payments. Even though these donors wanted to make just one payment, the company that processed the donations used so-called dark patterns to trick them into signing up for recurring payments.
The payment processor buried the terms in the fine print and Trump campaign donors were opted into the payments since they did not specifically opt out by checking a box.
The bottom line
It’s all too easy to swipe your credit card and make a political contribution. Before you do that, be aware that you will not get a tax deduction on this donation. There are also legal limits to how much you can contribute.
If you use your card, you can benefit from any rewards it offers. But be careful not to be taken in by scams and ensure that your money is going to its intended recipient. Also, be sure you are signing up for a one-time payment, rather than periodic recurring payments, if that’s what you intend.