Amex cardmembers can now round up purchases to donate to charity

American Express on Thursday launched a new program called Amex Round-Up, allowing cardholders to round up their purchases and donate to charity when paying with American Express credit cards.

At present, this is a pilot program and not yet open to everyone with an Amex card. Let's take a look at who can participate, how Amex Round-Up works and how you can turn your next purchase into a charitable donation.

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What is Amex Round-Up?

Amex Round-Up is a new feature that allows cardmembers to round up their purchases and contribute the extra funds to charities of their choice.

As this is a pilot program, not everyone will be able to participate just yet. Eligible cardholders in the U.S. and U.S. territories will receive an email from American Express inviting them to participate in Amex Round-Up. Enrollment will be completed through a link in the email.

From here, they can select the Amex card they want to enroll in the program and choose the purchase categories they want to round up. The categories include bars and restaurants, entertainment, groceries, shopping, services, transportation and travel and leisure. During enrollment, cardmembers will be able to select an amount to round up in each category: to the nearest $1, the nearest $5 or the nearest $10.

After enrollment, cardmembers will be taken to the website for Philanthropi (which is a portfolio company of Amex Ventures) to create an Impact Account and select the charity or charities they want to receive the funds from Amex Round-Up purchases. An Impact Account is a donor-advised fund. At present, only primary accountholders — and not authorized users — are eligible to participate in Amex Round-Up.

How does Amex Round-Up work?

Amex Round-Up allocates your chosen donation amounts into the Impact Account at Philanthropi. During registration for Amex Round-Up, you will choose which purchase categories you want to round up and by how much. Eligible purchases in your designated categories will be rounded up according to your settings and you can see these funds in your Impact Account. Then you can donate them to your preferred charity or charities. You can manage your account by viewing your chosen charities, giving history and other account information.

Rather than choosing to round up purchases one at a time or giving one-time contributions to your preferred charities, you can automatically give on every purchase made with your enrolled Amex card. By using preset amounts and chosen spending categories, you can donate by rounding up the amount you've established in your settings — and only on purchases in spending categories where you choose to participate in Amex Round-Up. If you choose to round up to the nearest $5 and make a purchase of $2.25, then your round-up amount is $2.75.

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A spokesperson from American Express confirmed that the donations will appear on your credit card statement as a separate transaction from "AXP RU PHILANTHROPI." Thus, if you use a credit card that earns bonus points at restaurants to pay for a meal, you would not receive bonus points on the charitable donation amount — only on your original purchase amount. On the donation, you will earn your credit card's everyday earning rate on "other purchases" as long as the donation amount is 50 cents or greater.

The Amex spokesperson also confirmed that these donations through Amex Round-Up are tax deductible as charitable donations.

Related: The best credit cards to maximize your charitable donation

Bottom line

Amex Round-Up is a new feature rolling out for select Amex cardmembers as of Thursday and it will become available to additional cardholders in the future. Through the program, cardholders can add charitable donations automatically to purchases in the categories they choose.

If you have a favorite charity and would like to donate to it every time you use your American Express card, watch for an email from Amex to enroll your card. If you want to view or change your Amex Round-Up settings after enrollment, use the same link found in your original email from signing up for this feature.

Finally, note that the round-up donations are tax deductible but they do not earn bonus points — you'll get the everyday earning rate on the card you use.