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Credit Cards Go Green

By Deidre Shirley

Credit cards used to come in standard, gold, platinum, and black. Now there's the modern green, too.

Following other businesses and consumers that are going green, the credit card industry is dipping into this market. GE, Bank of America, Wells Fargo and the new company Brighter Planet all have new environmentally friendly credit cards on the market or in progress. If you want to save the dolphins, offset CO2 emissions or contribute to another "green" cause, it is now as simple as swipe, sign, and contribute.

Eco-friendly credit cards are affinity cards issued by a credit card company. The card issuer then donates a portion of your purchases (typically 1 percent through a rewards program) to a green - but beware. Sometimes the consumer gets to choose the specific cause, but most often the funds go to a general fund from which contributions are made to a variety of causes of the affiliate company's choosing, and you get little say where your contributions end up. So how do you find the best cause for you?

The Web is an easy way to target a green cause that works for you.
"I think especially consumers who are environmentally conscious will want to make sure they're supporting good causes; causes they are familiar with; causes that they feel comfortable with," said Curtis Arnold, founder of CardRatings.com.

Arnold says that things can get muddy when trying to research which organizations benefit from the donations from the credit card issuer.

Arnold says the best thing to do is ask them directly. Ask exactly what causes or products you can support that are environmentally friendly, and ask if you can specify a cause not already been affected by the rewards program. Some of the issuers have their catalogs online and will allow you to look at them or offer suggestions.

"Some will say you will just have to get the card and then find out. Don't ever settle for that answer," Arnold says.

Many credit cards add green causes as an option to their existing rewards program -- meaning your donations go to one pot for one or more causes, not a specific cause that you want to support.

"Really look at (the card) with a magnifying glass to find out some more information, because, ideally, you want them to give you the ability to support the cause of your choice," Curtis said.

So, do green cards stack up?
Going "green" does have some slight drawbacks. There are certainly more competitive cards if you do an apples-to-apples comparison of rewards cards. For example, if you opt for a cash-back rewards card like the Chase Freedom Cash Rewards card, you could actually use the cash back to donate to the charity of your choice.
Generally, you can expect an interest rate of about 1 percent higher than other credit cards, Arnold says. Otherwise, the terms and conditions -- such as over-the-limit, balance transfer and late fees -- are comparable to those of other credit cards.

With the Discover Wildlife card, which donates proceeds to the World Wildlife Fund to help save endangered species and protect endangered habitats, the variable rate ranges from 0 percent to 23.24 percent.
Of course, the better your credit, the better your interest rate.

Published: Friday 3rd of October 2008 06:14:15 PM

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