For most people, credit cards are an essential part of managing their financial lives. They provide a convenient way to pay, offer numerous protections (especially when shopping online), and many also offer additional advantages such as reward schemes, which can be very lucrative if you use the card a lot.
When choosing a credit card, a lot of people just look for the best interest rate, or the lowest fees, or the best rewards. However, increasing numbers of people are looking at ethical considerations when choosing a credit card as well, and the market for so-called ethical credit cards is growing. So, what is an ethical credit card?
People have different ideas of what constitutes ethical practice, and not everybody's concerns of the same. However, those who are interested in ethical credit cards may be looking for cards that are issued by banks and other financial companies that do not involve themselves with certain industries or practices (such as the arms trade or animal testing, for example), and/or they may want a card where a percentage of the money they spend is donated to a worthy cause - cards of this type are often also known as charity or affinity credit cards.
Many banks have traditionally not been too concerned with the social impact of their business practices. For example, many did and continue to lend money to businesses that engage in practices that many people would consider to be damaging to society, or to the environment and other species. However, as consumers become more aware of and concerned with such issues, the market has grown for ethical banks, which are willing to forego potential profits by turning down business from such companies. One well-known example of this type of bank is the Cooperative Bank in the UK. If you get a credit card (or any other financial products) from a bank like this, you can rest assured that the profits that you help the bank to make will not be used to fund dubious practices.
Charity or affinity ethical credit cards on the other hand, are issued by a wide variety of financial institutions, which may or may not have a good record when it comes to socially responsible practices. However, such cards can be a good way of showing your support for specific charitable causes. There are hundreds of different cards of this type to choose from, so whichever cause you support, there is probably a card available.
Typically, the bank will donate a percentage of the amount you spend on the card to the charity concerned, and may also make a flat rate donation when you initially get the card. The percentages involved are usually pretty small, but if you're using a card for your everyday expenses, it will add up over time, and many charities find that cards of this type make a valuable contribution to their bottom line.
As you can see, by choosing an ethical credit card, you have a way to make a positive difference in the world just by shopping as normal.