Politics

Credit Card Companies Profit Off Tragedy in Haiti

By Anne Landman

Many relief organizations are soliciting donations to help victims of the earthquake in Haiti using hotlines and Web sites that prompt people to use their credit cards. While most of the money people give will make it to the designated organizations, credit card companies are charging a two to three percent "transaction fee" or "charity processing fee" that gets subtracted from the donations. These hidden fees --which are estimated to amount to hundreds of millions of dollars -- are helping credit card companies profit significantly from the Haitian tragedy. There are a few rare instances when credit card companies have waived this fee: American Express temporarily waived its charity processing fee after the 2004 tsunami disaster, and Capital One has a "No Hassle Giving Site" through which it waives transaction fees for holders of Capital One Visa or MasterCards, allowing 100 percent of donations to go to charity. Charities are hesitant to protest credit card company fees, since they feel they have no choice but to accept credit cards and there is so much money at stake. There are currently no laws barring the fees. In fact, the government subsidizes credit card companies' profiting off of donations by making charitable contributions 100 percent tax deductible, even though only about 97 percent of the money given actually gets to the charity.

Full post as published by PR Watch on January 16, 2010 (boomark / email).