Charitable Donations Using Credit Card Points Aren’t Tax Deductible

Some of the major credit card issuers such as American Express, Bank of America, and Citibank now offer donations to charity as a way to redeem points earned through the use of their credit cards.

While this sounds like a very humane and generous option for credit card holders, it should be known that the contributions made to charities using credit card points cannot be deducted from your taxes.

Unfortunately by law it is the credit card issuer who is deemed the one donating, and thus only they can deduct the tax. If you’re looking for a way around it, exchange your credit card points for cash value, then write a check to the charity of your choice.

Aside from losing out on the tax-deductible benefit of donating via credit card points, you’ll also be paying an arm and a leg to donate a small amount. A simple $50 donation will cost anywhere from 5,000-6,000 points.

And if you use your own money, you’ll get a wider selection of charities to choose from, as opposed to the relatively small number offered by the credit card issuers.