Ethical credit cards
According to APACs, as the demand for ethical financial products shows no sign of abating, the credit card industry is now catering more than ever for customers who want to do their bit to help the environment.
Around 8% of the 185 million credit cards in circulation in the UK are cause-related cards that donate to charity each and every time you use them. If you pay your balance off in full each and every month, a green credit card can be a great way to spend money and save the planet at the same time.
The ins and outs of cause-related credit cards
There are more than 40 charity-related credit cards available in the market, and they donate a set amount to the charity of your choice.
With a green credit card, charities such as Greenpeace, the Woodland Trust, Worldwide Fund for Nature (WWF) and Water Aid will all receive a donation as soon as you take out a card. You can take comfort in knowing that all your purchases are going to a worthy cause.
Let’s look at some examples:
Amex Red - You can help join the fight against HIV / AIDS, because every time you shop, 1% of your total spend will be given to Global Fund, to help fight AIDS in Africa. What’s more, it’s a totally fee-free card, so there is no annual charge.
Greenpeace - Greenpeace is an independent and international campaigning organisation that uses non-violent confrontation to expose environmental abuse and force change for a sustainable future. The Greenpeace credit card, issued by the Co-Operative bank, raises vital funds for Greenpeace’s campaigning work against Governments and industries that don’t do their bit to protect the environment. When you take out a Greenpeace credit card:
- Greenpeace will receive £15 for every account opened
- An additional £2.50 is received if your account is used within six months
- For every £100 you spend, Greenpeace will get 25p
- Plus 25p for every £100 you transfer
Greenpeace, like many other green charities, is also campaigning to phase out PVC, a plastic used to make traditional credit cards which is harmful to the environment. All Greenpeace credit cards are made of PETG, a much more environmentally friendly material.
Co-Op also issue some other worthy cause credit cards:
- ActionAid Credit Card
- Amnesty International Credit Card
- The CAFOD Credit Card
- The Oxfam Credit Card
- The Shelter Credit Card
- The Tearfund Credit Card
- WaterAid Credit Card
- The Woodland Trust Credit Card
New this summer is an innovative green credit card launched by Barclaycard, called Barclaycard Breathe.
- Barclaycard Breathe will only issue online statements to save paper, and all advertising for the credit card will also be done online. The cards themselves will be made from PETG, a greener alternative to current PVC cards, and there will be a recycling scheme for old cards when new ones are issued.
- Breath cardholders will get discounts and lower-rate borrowing when they buy certain energy saving products or services, such as public transport ticket.
- Also, Barclaycard will donate 50% of its after-tax profits from Breathe to environmental projects around the world committed to reducing carbon emissions.
- The card will be launched this summer and will be the first of its kind to help customers reduce carbon emissions, donate to green causes and offer incentives to buy green products.
- First and foremost, think about your financial situation. If you have any outstanding debts then taking out another credit card is not a sensible move. Why not consolidate your debts with a 0% on balance transfer card and start to pay it off.
- If you are able to pay your balance in full, then choose a green charity that best suits your ethical views.
- Charity cards can be a good move if you pay off your balance in full each and every month. However, if you carry over a balance or transfer an existing balance with another credit card, you could find yourself paying more than you should.
- With the typical rate being 18.9% for the average cause-related credit card, be aware that there are more competitive cards available.
- Why not take out a 0% on purchases or a 0% on balance transfers credit card and make a donation to the charity of your choice instead?
- Whilst charities will receive a welcome boost for every card taken out, the donations made as you use the card are pretty small. You’d have to spend £400 to give Greenpeace £1 for example. If you’d like to help your chosen charity more, it’s easy to set up a monthly direct debit – you can be sure your charity will be grateful!
- Charity cards tent to work best if you use it as your primary card for all your spends, such as your clothes and food shopping. Nectar points are pointless – why not donate instead?
What to do next
- Check out our best buys for credit cards with 0% on purchases and 0% balance transfers credit cards
- See our selection of Ethical credit cards
- Subscribe to the Mailing Preference Service to help reduce unwanted junk mail, typically abused by loan and credit card companies.
- Make sure you set up online statements to save paper
