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Charitable giving can survive the crunch

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06/08/2008

Despite Brits feeling the pinch a year on from the start of the credit crunch, Moneyfacts has reiterated that donating to charity doesn’t have to involve putting your hand in your pocket.

Michelle Slade, analyst at Moneyfacts, said: “With charity savings accounts, the institution makes a donation to the selected charity, typically around 1% of the balance of your account.

“Savers should be warned that these accounts do not pay the highest rates on the market. By donating to charity, you could be losing out on additional interest from having your money in a best-buy account.

“However, it is worth noting that the majority of charity savings accounts are branch-based accounts and the rates on offer are equal to other branch-based accounts on the market.

“There are numerous charity savings accounts on the market, with affiliations to many worthy causes such as hospices, air ambulances and wildlife trusts. So whatever your chosen charity, you can make a donation just by having your money in a savings account.”

Charity credit cards are another way of donating without it having to cost you a penny.

Slade added: “A donation of up to £25 is made when the card is first issued or used. After this the card issuer will donate typically 0.25% of the value of purchases made.

“These cards do not offer the longest deals on the market, but with introductory purchases deals of 0% for six months and balance transfer deals of 0% for 12 months, they are not far off the market-leading deals.

“Another pitfall with these cards is that many charge high purchase APRs, with rates of 18.9% quite common. However, rates as low as 11.9% can be found and many charge rates around the market average. If you pay your balance off in full each month the APR is unimportant and you can donate to your chosen charity without paying a penny in interest.”

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