dsmith2904
ONE love, blood, life
[SIMG]http://images.forbes.com/media/2006/08/16/amex2.jpg[/SIMG]
Amex Leads Charge for Change
Parmy Olson
London - Seeing red isn't necessarily a bad thing. At least not in the U.K., where American Express is exclusively testing the Red Card, a new charge card that donates a percentage of every purchase to fight AIDS in Africa.
Much of the, well, credit for the idea belongs to rock star and activist Bono. "This is really sexy to me. It's sexy to want to change the world," he told reporters during last January's World Economic Forum in Davos, Switzerland, where plans for the card were announced. (Bono is a founding member of Elevation Partners, a private equity firm that recently invested in Forbes.com's parent, Forbes Media.) "I take it out a couple of times a day just to look at it."
Amex isn't the only company he's enlisted. Joining the effort are Motorola, Gap, Giorgio Armani and Nike subsidiary, Converse. Each brand has banded together to create Product Red T-shirts, sneakers and sunglasses. A percentage of each item sold benefits the Geneva-based humanitarian group, Global Fund to Fight AIDS, Tuberculosis and Malaria.
Amex gives 1 percent of every Red Card purchase to the fund, and the contribution increases to 1.25 percent if you spend more than £5,000 (about $9,500). So, put £1,500 ($2,850) on the plastic and Amex will donate £15 ($28.50); enough, it says, to provide over 200 treatments for the prevention of mother-to-child HIV transmission.
It's hard to argue with any of Product Red's noble goals. But is it a more effective branding gimmick than it is a philanthropic fundraiser? "It's a good marketing tool," says Maureen Hinton, a senior retail analyst at Verdict Research who is skeptical about the long-term effects of the Product Red campaign, but more optimistic about Amex's new card. "People feel a bit better if they feel some of the money they're spending is going to a good cause."
But for those looking to get more altruistic bang for their buck, skip the plastic and stick with checkbook charity. Amex's Red Card touts 12.9 percent APR, so any Brits who spend £5,200.00 ($9,880) over the course of nine months will rack up an interest payment of £670.80 ($1,275) on the Red Card, leaving Amex to donate £53.00 ($101).
Let's suppose you opt for a credit card that charges 0 percent APR, such as with Amex's Blue Card, which offers 0 percent APR for the first 15 months. You'd end up saving £670.80 ($1,275) after the same period of time--a hefty sum that you could then bequeath to charity.
"It's not the lowest rate on the market, but it is still a competitive rate," said Amex spokeswoman Deepa Bose, adding that the 1 percent donation was in addition to a package of benefits and services.
There's mixed reaction from charities on how effective the Red Card is. "Credit cards can be a quick, easy and painless way for individuals to give money to causes," said Fiona Hesselden, deputy executive director of UNICEF U.K. "But there are other ways that people can donate or campaign for HIV/AIDS projects, including individual donations to charities."
Relief agency Oxfam, which has a partnership with Visa, is a fan of the Red Card. "It's about giving people a wide range of choices on how they can donate," said spokesman Kim Tan.
Might the so-called "conscience consumers" end up giving more money to charity if they weren't saddled with the card's 12.9 percent interest rate? Tan doesn't think so. "It's just an additional way to give more if the card is specifically targeted at people who already donate regularly," he said.
American Express is not saying when it will introduce the Red Card to the United States, or how many cards it has issued so far in Britain. A spokeswoman for the company said that its performance in the U.K. would determine when it would be launched in other markets. But there are signs that the company may be eyeing an expansion of the program. Last month, it tapped American tennis star Andy Roddick to appear in a series of Red Card ads.
The good news for Amex: The card's already received some buzz on U.S. blogs and forums. Not only do people want to improve their charitable giving, it seems they like the idea of having a scarlet-colored card peeking out of their wallets. Maybe it really is "sexy" to want to change the world.
--Forbes
Amex Leads Charge for Change
Parmy Olson
London - Seeing red isn't necessarily a bad thing. At least not in the U.K., where American Express is exclusively testing the Red Card, a new charge card that donates a percentage of every purchase to fight AIDS in Africa.
Much of the, well, credit for the idea belongs to rock star and activist Bono. "This is really sexy to me. It's sexy to want to change the world," he told reporters during last January's World Economic Forum in Davos, Switzerland, where plans for the card were announced. (Bono is a founding member of Elevation Partners, a private equity firm that recently invested in Forbes.com's parent, Forbes Media.) "I take it out a couple of times a day just to look at it."
Amex isn't the only company he's enlisted. Joining the effort are Motorola, Gap, Giorgio Armani and Nike subsidiary, Converse. Each brand has banded together to create Product Red T-shirts, sneakers and sunglasses. A percentage of each item sold benefits the Geneva-based humanitarian group, Global Fund to Fight AIDS, Tuberculosis and Malaria.
Amex gives 1 percent of every Red Card purchase to the fund, and the contribution increases to 1.25 percent if you spend more than £5,000 (about $9,500). So, put £1,500 ($2,850) on the plastic and Amex will donate £15 ($28.50); enough, it says, to provide over 200 treatments for the prevention of mother-to-child HIV transmission.
It's hard to argue with any of Product Red's noble goals. But is it a more effective branding gimmick than it is a philanthropic fundraiser? "It's a good marketing tool," says Maureen Hinton, a senior retail analyst at Verdict Research who is skeptical about the long-term effects of the Product Red campaign, but more optimistic about Amex's new card. "People feel a bit better if they feel some of the money they're spending is going to a good cause."
But for those looking to get more altruistic bang for their buck, skip the plastic and stick with checkbook charity. Amex's Red Card touts 12.9 percent APR, so any Brits who spend £5,200.00 ($9,880) over the course of nine months will rack up an interest payment of £670.80 ($1,275) on the Red Card, leaving Amex to donate £53.00 ($101).
Let's suppose you opt for a credit card that charges 0 percent APR, such as with Amex's Blue Card, which offers 0 percent APR for the first 15 months. You'd end up saving £670.80 ($1,275) after the same period of time--a hefty sum that you could then bequeath to charity.
"It's not the lowest rate on the market, but it is still a competitive rate," said Amex spokeswoman Deepa Bose, adding that the 1 percent donation was in addition to a package of benefits and services.
There's mixed reaction from charities on how effective the Red Card is. "Credit cards can be a quick, easy and painless way for individuals to give money to causes," said Fiona Hesselden, deputy executive director of UNICEF U.K. "But there are other ways that people can donate or campaign for HIV/AIDS projects, including individual donations to charities."
Relief agency Oxfam, which has a partnership with Visa, is a fan of the Red Card. "It's about giving people a wide range of choices on how they can donate," said spokesman Kim Tan.
Might the so-called "conscience consumers" end up giving more money to charity if they weren't saddled with the card's 12.9 percent interest rate? Tan doesn't think so. "It's just an additional way to give more if the card is specifically targeted at people who already donate regularly," he said.
American Express is not saying when it will introduce the Red Card to the United States, or how many cards it has issued so far in Britain. A spokeswoman for the company said that its performance in the U.K. would determine when it would be launched in other markets. But there are signs that the company may be eyeing an expansion of the program. Last month, it tapped American tennis star Andy Roddick to appear in a series of Red Card ads.
The good news for Amex: The card's already received some buzz on U.S. blogs and forums. Not only do people want to improve their charitable giving, it seems they like the idea of having a scarlet-colored card peeking out of their wallets. Maybe it really is "sexy" to want to change the world.
--Forbes
I find this despicable. 
