Eco-friendly credit cards are coming of age. Over the last few years, banks have been greening their operations, rolling out initiatives like paperless banking and offering rewards for eco-friendly purchases. Many credit cards are now co-branded with environmental organizations, promising to do some good every time you swipe, from offsetting carbon emissions to donating to an environmental cause.
“Having a green credit card is an easy way to benefit environmental groups with everyday spending,” says Todd Larsen, director of corporate responsibility at Green America, a nonprofit that promotes socially just and environmentally sustainable buying.
Not all credit cards making environmental claims can be considered equal, Larsen notes. “The least green would be the [regular] card that comes from a mega-bank that doesn’t reflect your environmental values; then there would be the co-branded cards that support an environmental organization, but still come from a bank that engages in questionable practices,” he says. “The greenest cards would be ones tied to an institution that shares your values that also contributes to a good cause.” In other words, a credit card’s green credibility is determined by the practices of the institution to which it is tied.
According to Larsen, if you’re looking to go green, mega-banks like Bank of America or Citi can’t compete with smaller lenders. “Unlike mega-banks, where your money can go to support predatory lending practices or investments in coal, community investing banks and credit unions make responsible lending their mission,” he says.
When Bigger Is Better
Robbie Adler, director of business development and strategic partnerships for Brighter Planet, which teamed up with Bank of America on a carbon-offsetting Visa card, said that there are notable advantages to working with a big bank.
“We were looking to bring this product to mainstream America, and not just those folks who are already in tune with environmental initiatives,” Adler says. “You get the benefits of a large institution, like accessibility to branches and great online banking tools that will reduce the need for paper.”
As far as big banks go, Bank of America is pretty green, Adler notes. The bank recently announced a $20 billion initiative in support of environmentally sustainable business activity, and Bank of America received the best score of any commercial bank on its commitment to tackling global warming from Climate Counts, an organization that rates the world’s largest companies based on their impact on climate.
Despite its good standing, Bank of America does have some skeletons in its closet, like its coal investments, according to Green America. That’s why Brighter Planet, itself a small business from Vermont that looks to help individuals and businesses reduce their carbon footprints, has maintained full discretion about the environmental initiatives supported by its credit card, Adler says.
How Green Credit Cards Work
The Brighter Planet card works by building up EarthSmart points with each purchase, which are then channeled to support domestic renewable energy projects, like small-scale wind farms and methane digesters. According to their website, each point earned funds an estimated pound of carbon offsets. And thanks to the technology offered by the Bank of America association, Brighter Planet has been able to offer some innovative tools to their card users, like a carbon-footprint calculator that allows consumers to understand the environmental impact of their day-to-day choices.
Brighter Planet’s card is only one example of credit gone green. Other environmentally conscious cards, like the Nature Conservancy Visa, also from Bank of America, offer more conventional rewards to their users, like gift cards, eco-friendly merchandise or a free membership to the organization, besides the contribution to the cause itself.
“You’re doing some good by having a co-branded card with any environmental organization,” Larsen says. “There’s still benefit to a green card [with any bank], because some money is going to support an environmental mission.” But researching individual cards—and their rewards—he added, is an important first step.