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'Green' your spending with eco-friendly cards

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If you're looking for a way to "green" your everyday spending, you may want to start with the plastic in your wallet. A handful of banks offer socially conscious credit cards that donate a percentage of your spending to environmental causes.

"Here is a way where you can have a credit card where you can feel good that you're making a contribution," says Arthur Newman, co-founder and CEO of the card company, Sustain:Green. "You can show your friends, you can show your kids, you can set an example and say, 'I'm making a difference every day.'" (See chart.)

'Green' your spending with eco-friendly cards

But beware of cards that promise more than they deliver: Some "green" credit cards are relatively stingy to the nonprofits they support. Others come from major banks that critics say have a poor environmental track record.

Before you pick a card based on the cause it claims to support, "read the fine print," says Coleen Pantalone, an associate professor of finance at Northeastern University. "Don't get swept away by the ad." You may find you're better off choosing another card -- or forgoing a green credit card altogether and contributing directly to the organization of your choice, she says. "If you direct the money yourself, you have more control over where it goes rather than relying on a bank to make that choice for you."

An easy way to give
According to Todd Larsen of the environmental advocacy group Green America, socially conscious credit cards that donate a percentage of a cardholder's spending to a specific nonprofit can be a financial boon for environmental groups that depend heavily on donations.

"Every purchase you make actually does have an impact," he says. The total earnings that a nonprofit receives from these types of programs can add up quickly, translating into "tens of thousands of dollars or more each year," says Larsen.

The Nature Conservancy, an environmental conservation group, says it's received more than $13 million in donations generated by its 9-year-old affiliate card from Bank of America. Meanwhile, Working Assets, the company behind the CREDO Visa credit card, has donated an average of nearly $200,000 a month to a wide range of nonprofits, including the Rainforest Action Network, Friends of the Earth, the Center for Biological Diversity and Earthjustice.

According to Larsen, cardholders can multiply their environmental impact by choosing to bank with a community development bank or credit union that avoids contributing to climate change through the projects it finances. According to research conducted by Green America, six of the nation's biggest card issuers invest in coal mining. Four support coal-fired power plants. "If you were to choose a card from a larger entity, while they do fund some green projects, they also continue to support things that are heavily invested in fossil fuel," he says.

Many smaller banks and credit unions invest in their local communities instead. For example, at least 75 percent of the commercial loans made by the West Coast community development bank, Beneficial State Bank, go to socially responsible businesses and nonprofits, says CEO and co-founder Kat Taylor. "We have strong accountability to low-income consumers and to the environment we serve," she says.

A card that offers tangible support for the environment can also be empowering -- especially if you're feeling frustrated by the lack of Congressional action on climate change and aren't sure what you can do, says Sustain:Green's Newman. The new Sustain:Green MasterCard, for example, helps cardholders lower their carbon footprint by rewarding them with carbon offsets. With every purchase a cardholder makes, the company eliminates two pounds of carbon on their behalf by investing funds into a rain forest conservation project in Brazil. The Sustain:Green MasterCard itself is also biodegradable so you can feel good about not sending yet another card to the landfill, says Newman.

There's been a debate for a long time about whether these small actions help to bring us down the path of more sustainable lifestyles or if they just absolve us of the guilt and allow us to consume more.

-- Erik Assadourian
  Worldwatch Institute

"When you look at problems like this, it's really easy to be overwhelmed by the scale of it," he says. You might be thinking, "Climate change is going to take years. This is an enormous problem. The politicians aren't doing anything. I've got bills to pay. I've got kids to educate."

It's easy to just throw up your hands and say there's not much you can do about it, says Newman. "What we're doing is we're giving people a way they can do something about it that's not really disruptive to their life." 

A tool for overspending?
Some critics worry that these types of cards backfire by encouraging overconsumption. "You don't want to do anything that's going to encourage consumption because consumption is driving environmental degradation and pollution and climate change," says Diane MacEachern, author of the book, "Big Green Purse: Use Your Spending Power to Create a Cleaner, Greener World." "Green credit cards that encourage consumption are contrary to a true environmental ethic, which should be, first and foremost, reduce consumption."

Critics also are concerned that socially conscious credit cards tied to tangible environmental rewards will lull consumers into complacency and make them feel as if they've done all they need to do to promote sustainability. "It just allows us to feel better about our consumerism," says Erik Assadourian, a senior fellow at the Worldwatch Institute. "There's been a debate for a long time about whether these small actions help to bring us down the path of more sustainable lifestyles or if they just absolve us of the guilt and allow us to consume more."

Some studies have also shown that consumer products tied to a cause can wind up hurting nonprofits in the long run by discouraging additional giving. For example, a 2011 study published in the Journal of Consumer Psychology found some consumers tend to give less overall when they buy products that donate a portion of the sales.

Proponents say that because you'll likely need a card for at least some of your everyday purchases, you might as well choose a card that does some extra good. "There are several things in life where it's really helpful to have a credit card," says Larsen. "So we encourage people to have a responsible credit card for those needs."

Just be sure to limit your everyday spending and be mindful of the types of purchases you make, say experts. "If you want to go for an eco-friendly card instead of an airline miles card and that means you travel less and put less carbon in the world, that's probably a good thing," says Pantalone. But if you use the card to buy more than you otherwise would or to purchase unsustainable services or products, then you could wind up doing more harm than good.

"If consumers really want to use some of their consumer power to get us closer to a more sustainable world, then first and foremost, don't buy on impulse," says Assadourian. And, "when you spend your money, spend it on the greenest products available," adds MacEachern.

Tough to compare cards
If you decide to opt for an eco-conscious credit card, you may have trouble sorting through your options. Many of the "green" credit cards reviewed by CreditCards.com are vague about how much money they give back to the environment -- making it next to impossible for consumers to compare which cards deliver the most green for their buck.

Even the most environmentally friendly organizations aren't always transparent about how much money is donated to environmental causes.

For example, a community development bank called Beneficial State Bank has developed a reputation for responsible environmental stewardship, making it the bank of choice for many of the country's leading nonprofits, including the Sierra Club, Green America, Amazon Watch and the League of Conservation Voters. But if Beneficial State Bank cardholders who own an eco-friendly affinity card, such as the Green America Visa, want to know how much of their daily spending is donated on their behalf, they are out of luck.

According to Beneficial State Bank's Kat Taylor, the bank is contractually barred from disclosing how much interchange fee income -- the percentage of your purchase that lenders charge merchants -- is donated to affiliated nonprofits. "Our contracts with everybody don't allow us to disclose fee share," says Taylor, but "we try to be very generous."

Other green credit card programs, such as the handful of cards offered by Bank of America, are more forthcoming, but vary widely in the amount they give away. For example, Bank of America gives the Nature Conservancy $100 every time an affiliate card is opened and gives an additional $100 if you spend at least $500 in the card's first three months. But the issuer only gives the Defenders of Wildlife $1 when you open its affiliate card.

When you're comparing options, "have a healthy skepticism," says MacEachern. Look at the bank that's issuing the card as well as the card's environmental benefits. If details about profit-sharing are available, do the math and try to evaluate which card makes the biggest impact.

Also, be sure to take a look at the card's APR and fees, adds Pantalone. "There's nothing wrong with eco-friendly credit cards. We all have credit cards these days. But be sensible in your choice of which one."

Green credit cards
  Amazon wath logo
  Amazon Watch Visa Platinum
  ISSUER
Beneficial State Bank/TCM Bank
  GREEN BENEFITS
  A percentage of every purchase is donated to Amazon Watch, an environmental conservation and social justice group.
  ADDITIONAL CARDHOLDER REWARDS
  1 rewards point for every dollar spent. No cap on the amount of points that can be earned. Rewards can be used toward travel or merchandise.
  STANDARD APR
  9.99% to 17.99%
  ANNUAL FEE
  None

  Credo logo
  Credo
  ISSUER
Comenity Bank
  GREEN BENEFITS
  10 cents for every purchase is donated to a rotating group of nonprofits working for environmental sustainability, world peace and social justice. Previous beneficiaries include: Friends of the Earth, Rainforest Action Network, Earthjustice, Center for Biological Diversity and ForestEthics. If you spend $500 in the first 60 days of opening your account, 25 trees will be planted on your behalf.
  ADDITIONAL CARDHOLDER REWARDS
  3 rewards points for charitable donations and grocery store purchases; 1 rewards point for all other purchases; Receive a $50 Restaurant.com e-gift card after registering card and making first purchase. No limit on the number of points you can earn to put toward statement credits, gift cards, merchandise or travel.
  STANDARD APR
  13.99% to 24.99%, $2 minimum interest charge for any period interest is due.
  ANNUAL FEE
  None

  Defenders of wildlife logo
  BankAmericard Cash Rewards Visa for Defenders of Wildlife
  ISSUER
Bank of America
  GREEN BENEFITS
  $1 is donated to Defenders of Wildlife when you open your account and an additional $0.05 will be contributed on your behalf for every $100 you spend.
  ADDITIONAL CARDHOLDER REWARDS
  3 percent cash back on gas station purchases and 2 percent cash back on grocery store purchases for the first $1,500 in combined purchases in each category; 1 percent cash back on all other purchases. Receive an additional $100 if you spend at least $500 within the first 90 days of opening your account.
  STANDARD APR
  12.99% to 22.99%
  ANNUAL FEE
  None

  Green America logo
  Green America Visa Platinum
  ISSUER
Beneficial State Bank/TCM Bank
  GREEN BENEFITS
  A percentage of every purchase is donated to Green America, an environmental, social and economic justice advocacy group.
  ADDITIONAL CARDHOLDER REWARDS
  1 rewards point for every dollar spent. No cap on the amount of points that can be earned. Rewards can be used toward travel or merchandise.
  STANDARD APR
  9.99% to 17.99%
  ANNUAL FEE
  None

  Halocard logo
  HaloCard
  ISSUER
First American State Bank
  GREEN BENEFITS
  1 percent of every purchase is donated to any nonprofit of your choice. You can also donate the cash value of your rewards points to your chosen nonprofit.
  ADDITIONAL CARDHOLDER REWARDS
  1 rewards point for every $100 spent. No cap on the amount of points that can be earned.
  STANDARD APR
  13.90%, $1 minimum interest charge for any period interest is due.
  ANNUAL FEE
  None

  League of Conservation Voters logo
  League of Conservation Voters Visa Platinum
  ISSUER
Beneficial State Bank/TCM Bank
  GREEN BENEFITS
  A percentage of every purchase is donated to the League of Conservation Voters, an environmental advocacy group.
  ADDITIONAL CARDHOLDER REWARDS
  1 rewards point for every dollar spent. No cap on the amount of points that can be earned. Rewards can be used toward travel or merchandise.
  STANDARD APR
  9.99% to 17.99%
  ANNUAL FEE
  None

  living_future_institute logo
  International Living Institute Visa Platinum
  ISSUER
Beneficial State Bank/TCM Bank
  GREEN BENEFITS
 

A percentage of every purchase is donated to the International Living Institute, a green building advocacy group.

  ADDITIONAL CARDHOLDER REWARDS
  1 rewards point for every dollar spent. No cap on the amount of points that can be earned. Rewards can be used toward travel or merchandise.
  STANDARD APR
  9.99% to 17.99%
  ANNUAL FEE
  None

  Loop logo
  Loop
  ISSUER
Albina Community Bank
  GREEN BENEFITS
  A percentage of every purchase is donated to a select group of nonprofits, including Groundwork Portland and the Gifford Pinchot Task Force.
  ADDITIONAL CARDHOLDER REWARDS
  Optional rewards through the third-party program, ScoreCard Rewards.
  STANDARD APR
  11.99%
  ANNUAL FEE
  $0 or $60 with ScoreCard Rewards program

  nature conservacy logo
  BankAmericard Cash Rewards Visa benefiting The Nature Conservancy
  ISSUER

Bank of America

  GREEN BENEFITS
  $100 is donated to The Nature Conservancy when you open your account. A minimum .05 percent of all net retail purchases is also donated on your behalf. Card material is made out of partially recycled content. An additional $100 will be donated to the Nature Conservancy if you spend at least $500 within the first 90 days of opening your account.
  ADDITIONAL CARDHOLDER REWARDS
  One-year subscription to Nature Conservancy magazine; 3 percent cash back on gas station purchases and 2 percent cash back on grocery store purchases on the first $1,500 in combined purchases in each category; 1 percent cash back on all other purchases. Bonus offer: Receive an additional $100 if you spend at least $500 within the first 90 days of opening your account.
  STANDARD APR
  12.99% to 22.99%
  ANNUAL FEE
  None

  nwf logo
  BankAmericard Cash Rewards Visa Signature benefiting the National Wildlife Federation
  ISSUER
Bank of America
  GREEN BENEFITS
  $3 is donated to the National Wildlife Federation when you open your account. An additional $.05 will be contributed on your behalf for every $100 you spend. In addition, Bank of America will contribute an extra $3 every year you renew your card.
  ADDITIONAL CARDHOLDER REWARDS
 

3 percent cash back on gas station purchases and 2 percent cash back on grocery store purchases on the first $1,500 in combined purchases in each category; 1 percent cash back on all other purchases. Receive an additional $100 if you spend at least $500 within the first 90 days of opening your account. You can choose how you want to redeem your cash and your cash rewards will not expire. 

  STANDARD APR
  12.99% to 22.99%
  ANNUAL FEE
  None

  ReDirect logo
  ReDirect Guide Visa Platinum
  ISSUER
Beneficial State Bank/TCM Bank
  GREEN BENEFITS
  Supports the environment through carbon offsets. Approximately 15 percent of the card's interchange income (currently 1.4 percent of each purchase) is sent to Sustainable Travel International's carbon offset and renewable energy program. An additional $15 is sent each time an account is opened.
  ADDITIONAL CARDHOLDER REWARDS
  1 rewards point for every dollar spent. No cap on the amount of points that can be earned. Rewards can be used toward travel or merchandise. Also, access to discounts and special offers from participating green companies.
  STANDARD APR
  9.99% to 17.99%, $1 minimum interest charge for any period interest is due.
  ANNUAL FEE
  None

  Sierra Club logo
  Sierra Club Visa Platinum
  ISSUER
Beneficial State Bank/TCM Bank
  GREEN BENEFITS
  A percentage of every purchase is donated to the Sierra Club.
  ADDITIONAL CARDHOLDER REWARDS
  1 rewards point for every dollar spent. No cap on the amount of points that can be earned. Rewards can be used toward travel or merchandise.
  STANDARD APR
  9.99% to 17.99%, $1 minimum interest charge for any period interest is due.
  ANNUAL FEE
  None

  Sustain logo
  Sustain:Green MasterCard
  ISSUER
Commerce Bank
  GREEN BENEFITS
  Made out of biodegradable material. Supports the environment through carbon offsets. For every dollar spent, Sustain:Green will purchase and retire 2 pounds of carbon on your behalf. It will also eliminate 5,000 pounds of carbon after you make your first purchase. If you spend at least $1,250 in a calendar quarter, an additional 2,500 pounds will be eliminated. All carbon offsets are purchased and recorded by the American Carbon Registry. Carbon offset purchases help fund the Mata no Peito rain forest preservation projects in Brazil.
  ADDITIONAL CARDHOLDER REWARDS
  Earn additional carbon reductions by referring friends to card program.
  STANDARD APR
  12.24-18.24%
  ANNUAL FEE
  None

  WWF logo
  World Wildlife Fund BankAmericard Cash Rewards Visa
  ISSUER
Bank of America
  GREEN BENEFITS
  $5 is donated to the World Wildlife Fund when you open your account. An additional 0.25 percent of all net purchases is also donated on your behalf. Bank of America will also contribute an extra $5 every year you renew your card.
  ADDITIONAL CARDHOLDER REWARDS
  3 percent cash back on gas station purchases; 2 percent cash back on grocery store purchases; 1 percent cash back on all other purchases. Receive an additional $100 if you spend at least $500 within the first 90 days of opening your account. You can choose how you want to redeem your cash and your cash rewards will not expire.
  STANDARD APR
  12.99% to 22.99%
  ANNUAL FEE
  None
See related: Need a tax deduction? Try a credit card charity network, Charity gift cards let recipient donate to favorite cause

Published: April 22, 2015


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