Just as I thought life was getting back to "normal" things were slightly derailed. Once I have a chance to mentally regroup I'll go into more details. In the meantime enjoy this great guest post by Michael D. from Credit Card Forum.

From past blog posts, I know Mr. and Mrs. NtJS aren’t exactly the biggest fans of credit cards to say the least. I actually run a credit card forum/blog myself, and as ironic as this may sound, I actually agree with most of their viewpoints on them! There are definitely quite a few problems that come about with using credit cards. Today I want to talk about one of those problems that most people don’t consider.

First, let’s rewind back to the 80’s and 90’s… do you remember how little credit cards were used? In the small town I lived in Michigan, I remember grocery stores only accepted cash or checks for payment. In fact back then, the only places that always took credit were department stores and the like. Nowadays it seems that almost everyone takes plastic… grocery stores, doctors’ offices, and even charities. That last one is what I want to talk about, let me give you an example…

A while back I read a book called the The Hole in Our Gospel: What does God expect of Us? It’s written by a man named Richard Stearns, previously a “jet set” CEO who ended up becoming President of the Christian charity World Vision, initially against his own will. In a nutshell, this raw and brutally honest story is a must-read for everyone and the message is so powerful that World Vision is now my favorite charity. But what does this have to do with credit cards? Let me explain…

Since reading the book, I’ve been sponsoring a child through World Vision. I have this amount automatically charged to my credit card every month. In addition, the bulk of my giving is made to their general fund, another amount which is charged to my card. Now this is a very efficient organization (a very important criteria for me when giving) and while reviewing their most recent annual report, here’s how the numbers break down:

For every dollar:

• 89% goes directly to the programs
• 7% for fund raising costs
• 4% for administrative/management/general expenses
  

Now that’s pretty impressive… only 4 percent goes to actually running the organization. But what about that second number, the 7 percent? Make no mistake about it, that is an extremely low amount to pay for fund raising regardless, but what if everyone used checks instead of credit cards for their donations? How much lower would that fund raising number be? Because yes, unfortunately the credit card companies don’t even give charities a break… they still charge them those pesky processing fees.

Now I’m not an expert on credit card (interchange) fees, but according to Wikipedia the average is 1.79% in the United States. That means 1.79% of transactions goes to the credit card company. I’ve been using my Chase Freedom card, which is a rewards card, and those typically carry a fee that's even 0.30% or more higher. So according to those calculations, probably around 2.09% or more my giving to World Vision is being eaten up by Visa and Chase Bank. It may not sound like much, but if you take 2% of all their credit card donations, that ends up being a lot of money!

So what’s the lesson? I definitely need to use the check book from now on. If every one of their donors skipped credit cards, just imagine how many more people could be helped… with the same amount of money given! Of course at the same time, I do realize there is a “convenience factor” of credit card giving that may bring in some money from people who normally wouldn’t give because of the “hassle” of writing a check (and obviously a 98% donation is better than none at all!) but for everyone else, please don’t be lazy… use your checkbook and your money will go even further.

About the Author: Michael is a forum moderator and blogger at CreditCardForum.com, which is a website for credit card reviews and discussions. Although he’s fanatical about raking up his rewards, he does acknowledge that credit cards truly do have a lot of drawbacks, are definitely not suitable for everyone, and can lead to nightmares if a balance is carried.