Credit Card Overview
Fact: there are more credit cards than people in Britain and the country's debt problems are amongst the worst in the world.
When choosing a card provider, its policies on responsible lending and debt advice provision are of key importance. The green and ethical concerns you bring to who you bank with, concerns about equal opportunities or the environment, are just as applicable to who you get your credit card from.
This section also looks at the green or ethical worth, as well as the practicalities of charity affinity cards.
Does your credit card provider treat its customers responsibly?
What are charity affinity cards and how do they work?
Does your credit card provider treat its customers responsibly?
Responsible lending
According to the British Banker's Association (BBA), responsible lending means 'providing credit, based on background checks and professional judgement, to people who can accommodate repayments without getting into financial difficulty'. As the sheer number of people in debt today shows, these principles are not always well applied by credit lending institutions. In 2008 our credit card debt hit £54.4bn and continues to rise.
Transparency is key - credit card customers should be presented with the terms and conditions attached to their card up front and in plain English. It is important to check whether your provider has a responsible lending policy in place, and how it is implemented if it does exist.
Debt management
Credit card debt is all too common in the UK. Some financial institutions offer basic in-house debt advice services, the scope of which can vary greatly. Often providers will refer customers to free advice services including the Consumer Credit Counselling Service, the Citizens Advice Bureau and others.
Use our search tool to find details of your provider's debt management services. Information on this subject can be found under 'Responsibility toward Customers'. Alternatively contact your provider directly for further information.
What are charity affinity cards and how do they work?
Affinity card providers make a small donation on behalf of the card holder to the charity it is associated with.
Such charity donations average around 25p per £100 spent. So, in order to donate £100 to your charity of choice you'd have to spend £40,000 with the card. Most providers also make a one-off donation of between £5 and £25 on each new card account.
In their analysis of charity affinity cards moneysavingexpert.com suggest that a more effective way to donate money is to use cash back cards. Cash back cards operate in much the same way as affinity cards except that instead of a charity, additional money goes to the card holder and this money is usually considerably more than a standard charity card donation. The cash back card holder can then donate the money they have earned to the charity of their choice and if eligible, Gift Aid it, so rather than £1 the charity will receive £1.28. Donations on affinity cards are not eligible for Gift Aid.
View the range of charity affinity cards available on the market click here.
Your next steps
See our guide Next Steps - Credit Cards for more suggestions on how to find out about your credit card provider's green and ethical policies, how to contact them and how to find the right credit card for you.
Credit Card Search
Credit Card Provider
American Express
Green/Ethical Products
- None – charity affinity cards are not considered to be green or ethical products
Ethical Lending or Insurance
As the company is a credit card provider it does not lend money in a way that would necessarily require an ethical lending policy. Responsible lending to customers, however, is a key issue.
Responsible Lending
1. Credit Lending
American Express UK does not indicate if it runs credit checks on potential customers.
However, the online application for all credit cards includes the following provisos:
- Applicants must be aged 18 or over
- Have a current UK bank or building society account
- Have an Annual Household Income of £40,000
- Have a permanent UK home address
- Have no County Court Judgements for non-payment of debt
- Have been trading for over one year if self-employed
The company states that it informs customers of any unrequested increases in their credit limits.
2. Debt Warning
The company outlines various penalties arising from payment default in its card products’ Terms and Conditions. These include fees for non-payment of minimum balance within 25 days, rejected payments (including possible solicitors fees) and ‘overlimit’ charges.
Customers are not referred to the FSA Debt Test or an equivalent test. This test is designed to help customers find out whether you have, or are likely to have, problems with borrowing. It also has tips on what to do if customers find themselves in difficulties.
3. Debt Management and Advice
No policies were found publicly on handling customers who have defaulted on their payments or fallen into financial difficulty. Also, no reference to the possibility of taking payment holidays was found.
However, American Express states that if customers report difficulty making payments, the company may look at ways of assisting them on a case by case basis.
Financial Exclusion
American Express provide statements and other documentation in Braille and in audio formats.
In the US, the company has provided financial literacy training to teens for whom English is their second language, as well as disabled adults to help them open current or savings accounts.
Examples of American Express’s work with small business includes:
- The bundesweite grunderinnenagentur in Germany (National Agency for women start-ups and entrepreneurs) which partners entrepreneurs or successful businesspeople with women who have ideas for small businesses but are unemployed, on welfare or entering the workforce for the first time
- A microfinance program to assist women in Sydney, Melbourne and Brisbane in Australia with loans to get their businesses off the ground
- The American Express-Endeavor Argentina Leadership Development Program supporting entrepreneurs
Environment
The company’s environment policy addresses the key issues of energy efficiency and waste disposal as well as showing a commitment to future improvement of its environmental performance.
Carbon Neutral
American Express is committed to reducing the carbon footprint of its business operations by 10% by 2012.
Equal Opportunities
The company’s equal opportunities policy addresses the key issues of gender, race, disability and sexuality.
Women on the Board
American Express reported that 14.3% of board members were women (2007 figures).
Voluntary Standards & Initiatives
No green/ethical standards and initiatives were found that are relevant to American Express’s overall operations.
Charitable Giving
American Express donated 0.55% of its pre-tax profits in 2006. No data found for 2008/09.
American Express
- Credit Cards
American Express
American Express Services Europe Limited
Customer Services
Edward Street
Brighton
East Sussex
BN88 1AH
