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
Capital One
Green/Ethical Products
None
Ethical Lending or Insurance
As the company is a savings and credit card provider it does not lend money in a way that would necessarily require an ethical lending policy.
Responsible Lending
1. Credit Lending
Capital One offers unsecured credit only.
The bank states that it uses credit history information from two UK credit reference agencies, Experian and/or Equifax as well as personal details requested by the credit applicant including employment and income status.
The bank does not have a clear policy to avoid unrequested increases of customers’ credit limits. It does say it will increase customers’ limits on their fourth statement if they manage their account well, i.e. stay within their credit limit and make repayments on time. It does not state whether customers will be made aware of the increase or asked if they require it.
2. Debt Warning
The bank issues the following warning in its terms and conditions: ‘Missing payments could have severe consequences and make obtaining credit more difficult.’
It does not however, provide a link to the FSA Debt Test or an equivalent. This test is designed to help customers find out whether they 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
The bank offers a telephone advice service to customers who default on payments or have related payment problems. However, no specific information about the nature of this advice or practical help the bank might offer to alleviate financial difficulty e.g. loan restructuring, payment holidays etc, was found. It also refers customers to free debt advice services such as the Money Advice Trust.
Financial Exclusion
Capital One states that it offers documents in large print and Braille to customers with sight impairments and a typing and sign-language video relay services are available to those with hearing problems.
It does not provide any products aimed at the financially excluded. Nor does it engage in partnerships with credit unions or other mutual organisations. It is not within the company’s remit to provide funding for microfinance projects.
Environment
The company shows a commitment to improving its environmental performance and is in the process of assessing its environmental impacts and how to address them. It does not have a clear policy addressing specific environmental issues, however.
It states that it launched an ‘Environmental Project’ in 2007 to ensure its business and its employees act in an environmentally sustainable manner. It further states that it has educated its employees on green practices and has begun using sustainable materials in its offices. The company further states that it has began purchasing energy from renewable sources though whether it is all or part is not clear.
Carbon Neutral
No pledge on carbon neutrality has been made. In 2008 Capital One stated that it was ‘assessing’ the carbon footprint of its operations and how it could reduce it.
Equal Opportunities
The company’s policy addresses the key issues of gender, race, disability and sexuality.
Women on the Board
A figure of 11.1% was reported for 2008.
Voluntary Standards & Initiatives
Capital One was not found to be a signatory/member of any relevant charters or initiatives.
Capital One
- Savings
- Credit Cards
