Sam Dunn: Good for your conscience, but not a lot else

"Style over substance" is a common criticism levelled at many targets from fancy football teams to government policy.

I propose my own contribution to this ignoble list: charity credit cards.

There's no finer way to rebadge spending on your plastic than as "giving something back". But as a financial product and consumer deal, there's little to commend them.

The style is in the sales pitch. Take out a charity card and the lender will make a one-off lump sum donation to your chosen cause. And that's not all: every time you hit the shops, a percentage of your spend will be passed to the charity.

Et voilà - credit with a conscience. How nice is that? The substance, however, is another matter. That one-off, up-front payment can be as little as £5.85 (a payment by Nationwide building society, which supports Comic Relief), although most tend to hover between £15 and £20. These are genuine donations but hardly generous.

Nearly all charity cards pay just 0.25 per cent of your spending. So blow £300 in a weekend, and your good cause gets a miserly 75p. The exception to this paltry amount is supplied by Nationwide, which offers 0.5 per cent on all card purchases. But this is offset by its parsimonious lump-sum donation.

And what about the cost to you? To claw back the money passed on to the charities, lenders levy higher annual percentage rates. So the standard APR on most charity cards lies between 15.9 and 17.9 - £4 a month or more for that £300 weekend splurge - although some do carry 0 per cent deals for six months or so.

This won't matter if you pay off the balance every month, but those who don't face steep interest payments.

Charity should begin at home, the saying goes, so there's absolutely no point in taking out such a card if it ends up costing you more in interest payments than the financial good it achieves.

To pay pounds to a lender for the privilege of channelling a few pence to a cause is ridiculous. None of this adds up to making charity cards a worthwhile endeavour.

Few lenders are committed to the concept. Bank of Scotland and MBNA are the two biggest providers and between them offer more than 1,000 donation cards for various charities. Beyond this, choice is severely limited, accounting for the lack of competitive offers.

If your favoured charity has struck an unfavourable deal with a lender, there's nothing you can do about it. You can, however, link your charitable instincts with plastic spending by opting for a mainstream card offering cashback.

For example, you could take up to 2 per cent in cashback with American Express's Blue credit card, and then give your savings to a charity at the end of the year while also taking advantage of Gift Aid. Under this scheme, every pound you hand to your chosen cause secures another 28p from the taxman.

Ask your charity for a Gift Aid form or you can print off an equivalent document from Revenue & Customs' website.

Further style was lent to credit card "conscience" spending last week with the launch of the American Express Red card by Bono (see News, page 19). This will give 1 per cent of your spending (1.25 per cent above £5,000) to the Global Fund, which finances the fight against Aids, tuberculosis and malaria.

With a lower standard APR than most comparable donation credit cards, it also offers 5.9 per cent for life on balance transfers made in the first six months (if made after this, they're charged at the standard 12.9 per cent).

However, keep an eye on your repayments. Like many other cards, Amex will pay off the cheapest debt - an early balance transfer, for example - first. So consumers must be aware that at the same time as this is being whittled away, interest is racking up on their new purchases.

Charitable feeling may create a warm glow but make sure it doesn't burn your wallet.

s.dunn@independent.co.uk