A new credit card is on the market, and it’s making ripples in the credit card and charity communities. It’s called the HaloCard, and it combines two seemingly opposite things—making a profit and participating in philanthropy. The HaloCard is a new startup, and it will allow users to donate 1% of their purchases to any registered 501(c)(3) of their choice.
How does it work? You can register for the card online, and once you start spending money will begin going to the charities of your choice once per quarter. Users get a tax deduction, and there are no annual fees for charities who receive donations. Community banks who issue the cards will have a lower interchange income by about half (0.25%-0.375% of the transaction) and they’ll have to pay the 1% of donations as well. But HaloCard also claims that people using the HaloCard will have a lower default rate than normal, meaning that it’s a safer bet than with some other cards.
The first set of cards will go out starting in May. The cards will be issued and serviced only by community banks and not by traditional big banks or credit card companies. HaloCard was founded by Nick Lepestos and Stanley Goldstein, and if they are able to tap into the 180 million cardholders in America, this could prove to be a valuable tool for registered nonprofits all over the country.
There are some 1.3 million registered nonprofits in the United States alone, and HaloCard claims it will have an easy-to-use database where users can easily sort, search for, and select which charities they want to donate to. It will be slow going at first, as the startup will have just a handful of available nonprofits for people to choose from. As the cardholder numbers grow, more charities will be added.
HaloCard aims “to revolutionize charitable giving” by harnessing “the power of the many who can give a little.” It’s a noble cause to be sure, and the company’s website certainly makes it clear that even though it’s a for-profit company, they truly do care about giving back. Their corporate principles include earning the respect of the philanthropic community, putting the community and cardholders above shareholders, and deeply valuing CSR.
It will certainly be interesting to see where HaloCard goes from here. Hopefully it will find success through giving and fulfill its mission of helping many people develop lifelong habits of giving back.