Organizations from book clubs to non-profits are getting into the credit card business, offering incentives such as books, tote bags, and other freebies for signing up. The cards are offered through these organizations from conventional credit card companies, and can feature ongoing special benefits related to the user’s interests. The credit cards often feature designs that reflect the organization’s value; a book club-related credit card may offer literary designs, while a card offered by an environmental organization may offer a variety of nature or animal themes.
The benefits to the credit card companies involved are obvious; but what do the organizations themselves gain? For one thing, it is well known that people who make purchases using credit cards spend more than people who pay with cash or by check; the organizations are banking on that to increase their customers’ or members’ purchases or donations. For another, a credit card design that carries the organization’s name and design is a practical, ever-present advertisement for that organization.
The credit card companies can offer cash and other incentives to the organizations for allowing them to promote their cards to members, and may also offer ongoing payments based on their customers’ purchase or donation history. The arrangement is good business for the credit card company and for the organizations. The members themselves need to be careful; interest rates are often high, or offer a low initial rate with a big boost after the introductory period is over. If the interest rate is low, if it offers the ability to transfer balances from higher-interest rate cards, and if the member’s financial situation warrants, then it could be a great deal.
Aldene Fredenburg is a freelance writer living in southwestern New Hampshire. She has written numerous articles for local and regional newspapers and for a number of Internet websites, including Tips and Topics.
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