American Express Red Credit Card Review

Posted: 19 February 2008 by Harriet Meyer

This American Express card was launched in January 2006 as one of a series of products sold under the Product (Red) brand to raise cash for AIDS charity the Global Fund.

At the time, fashion labels like Gap and Armani also pledged to do their bit, by donating a share of profits from t-shirts, sunglasses and trainers to promote U2 front man Bono's AIDS awareness campaign. The card donates one per cent of any annual spending up to £5,000, and then 1.25 per cent above that to a charity helping women and children affected by HIV and AIDS in Africa.

Its generous donation makes it one of the more appealing ethical credit cards, as many rivals only offer to give a paltry 0.25 per cent of any spending to a chosen charity. And it has a pretty flash bright red design which will add a bit of colour, alongside an ethical conscience, to anyone's wallet.

However, while it could also boast a competitive typical annual percentage rate (APR) of 12.9 per cent on launch, it has crept up to 16.9 per cent in the past year, which is a bog-standard rate. The balance transfer rate is 5.9 per cent for the life of the balance, provided you transfer it within the first six months. Amex's regular cash back card has a typical rate of 18.9 per cent, two percentage points higher. So your charitable contribution is not actually being clawed back by the card provider through a higher interest rate.

Something else to be aware of is that while Amex initially donated £5 per cardholder if they used their card in the first month, it has now scrapped this offer. Other charity card providers frequently give between £5 and £25 on first use.

In its favour, the website is easy to navigate, making paying bills a cinch, with an 'impact calculator' to work out the benefit your card contribution will make. For example, it claims that £100 spent on the card is enough to provide 17 treatments to prevent mother-to-child transmission of HIV. And yes, that means £1 -- at the one per cent donation rate -- funds 17 treatments.

But be warned -- taking out credit cards is never the best method of giving to charity, and it could prove pricey in the long run. Most borrowers would be better off seeking a card with an interest-free period on balance transfers and purchases, and then using any spare cash to give to charity without fear of sinking into debt.