Green Credit Cards

Everyone close to Chanté Evans, 30, knows being “green” is a priority for her. Each year on Earth Day, she teaches her fourth-grade students at McNair Discovery Learning Academy in Decatur, Georgia, about protecting the environment. Recycling in the home is second nature to her 10-year-old son, Ryan, whose birthday coincides with Earth Day.  She even conspicuously places large, pink-wrapped boxes marked separately for plastics, glass, and aluminum around the room at her monthly Alpha Kappa Alpha Sorority Inc. meetings. At just about every opportunity, Evans seeks services, products, companies, and methods that focus on the environment.

“We have only one Earth, and I have to do my part,” says Evans, a single mother. “I take my own bags to the grocery store and use online billing. It’s an added bonus to know that many places I do business with are making an effort to go green.” Evans is even considering acquiring a green credit card. “A green credit card is of interest to me because it gives back to the community and supports my ideals of going green.”

Several major credit card companies are actively marketing green or socially responsible cards for consumers like Evans. The cards allow a percentage of consumer purchases to go toward an environmental organization or cause. They are like standard rewards cards, except the benefits go to environmental organizations rather than the consumer. The interest rates are also similar to other reward cards and can range from a 0% promotional rate to between 9.99% and 18.99% post-promotional rates. Additionally, the card itself may actually be made of biodegradable materials.

There is an obvious benefit to the environment and organizations that support green efforts. But how much are consumers really benefitting? Bank of America offers a Brighter Planet Visa that donates one rewards point for every dollar in purchases to renewable energy projects, says LaToya Irby, credit and debt management expert at About.com. “GE Money offers the Earth Rewards MasterCard that donates 1% of each dollar charged to climate projects. Cardholders can also split their rewards between climate project donations and cash back. The Biodegradable Discover More Card rewards up to 5% cash back on purchases.”

Green credit cards have their good and bad sides. The pros are that “they are helping support the environment if this is a priority for the consumer,” says Ben Woolsey, director of marketing and consumer research for CreditCards.com

.  “It allows

value to be shared with the organization by simply harnessing the existing purchase behavior of the cardholder. The cons are that it might include a subtle inducement to spend more than you might otherwise, due to the feeling that it is going to a good cause. Getting into debt and incurring interest charges would more than offset the value of the earned reward or donation.”

If you, like Evans, are considering a green credit card, do your research. John Ulzheimer, president of consumer education for Credit.com, encourages consumers to focus more on the contract terms than on whether or not the card is “green.”

Credit.com, CreditCards.com, and CardRatings.com are among Websites that can help you compare rates and incentives such as cash back, rewards, and balance transfers. Consumers can also use the credit cards they already own to help the planet.

“While green credit cards boast about how much they benefit the environment, standard no frill, cash back credit cards usually offer considerably higher rebate percentages,” says Curtis Arnold, founder of CardRatings.com. “Wise consumers can just take their annual cash rebate from a regular cash back card and donate it to the green cause of their choice without any strings attached. Using this strategy will give you the most bang for your buck.”

This article originally appeared in the March 2010 issue of Black Enterprise magazine.

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