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.
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
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Credit Card Provider
Co-operative Bank
Green/Ethical Products
All Co-operative products are covered by their ethical policy. Products with a specific ethical or green benefit are listed below:
- Cashminder (Basic Current Account).
- Future Fund/ Bonus account (Children’s Savings and Bank Account).
- Energy Efficient Advance (Green mortgage and re-mortgage).
- Professional and Career Development Loan.
- Think Credit Card.
- Charity Credit Cards.
- Community banking including Community Directplus (free banking and pay credit interest for community and voluntary organisations).
- Lending to projects within the renewable energy and carbon reduction sectors.
- Microfinance.
- Services to Housing Associations including term loans and investments and general banking facilities as well as payment services for their tenants.
Ethical Lending or Insurance
The Co-operative Bank has an ethical lending policy which applies across all its transactions with businesses seeking finance.
On applying for banking services with The Co-operative Bank, all business customers are required to complete an Ethical Policy questionnaire. The Co-operative Bank states that it will only offer a business banking facilities when it is confident that there are no conflicts with its Ethical Policy.
The ethical lending policy includes exclusion criteria in human rights; the arms trade; corporate responsibility and global trade; genetic modification; social enterprise; ecological impact, and animal welfare areas.
Since 2011 The Co-operative Bank's Ethical policy has been extended to cover the investments underpinning its home and motor insurance products. As a result it does not purchase bonds issued by organisations that do not meet the criteria of the policy.
The Co-operative bank has internal controls to monitor its lending policy as well as inviting an independent auditor to comment on the implementation of their policies and publish the findings.
The Bank states that since its launch in 1992, The Co-operative Bank has withheld over £1.2 billion of funding from business activities that its customers have said are unethical.
Human Rights
The Co-operative Bank's ethical policy includes human rights criteria. It will not finance any organisation that advocates discrimination and incitement to hatred, or the manufacture or transfer of indiscriminate weapons, e.g. cluster bombs and depleted uranium munitions".
They will not finance any of the following:
- any government or business which fails to uphold basic human rights within its sphere of influence;
- any business whose links to an oppressive regime are a continuing cause for concern;
- any organisation that advocates discrimination and incitement to hatred;
- the manufacture or transfer of armaments to oppressive regimes;
- the manufacture or transfer of indiscriminate weapons, eg cluster bombs and depleted uranium munitions;
- the manufacture or transfer of torture equipment or other equipment that is used in the violation of human rights.
Since 1992, they have declined £385m finance to businesses in line with their Ethical Policy statements on international development and human rights. During 2012, 110 finance opportunities (2011:159) were referred to the Ethical Policy Unit in connection with international development and human rights, of which 17 were declined (2011: 13), with an estimated cost of £2,659,000 in terms of gross income foregone.
Financial Exclusion
The Co-operative Bank offers a range of products and services for the financially excluded.
- In 2012, 38% of the bank's branches were located in deprived areas.
- The bank also reports that finance to small businesses in deprived areas as a proportion of equivalent bank activity remains significantly above the industry average in 2012.
- The bank provides basic bank accounts to prisoners ready for use on release. 13,380 bank accounts for prisoners opened since 2009.
The Co-operative Bank offers a basic bank account, Cashminder, aimed at those who may not be eligible for a standard current account.
Credit Union Current Account launched in 2006 in partnership with the Association of British Credit Unions Ltd (ABCUL). In 2012, 25 credit unions were offered the account and over 36,500 (2011: 33,281) customers benefited.
In line with the Bank’s Ethical Policy commitment to support credit unions, a three-year strategy was developed and agreed in 2012. Principles are to provide credit unions and their members with: an accessible, Co-operative banking package; access to a range of Group products and services; and assistance and advice.
The company provides the following:
- Mobile and Internet Banking.
- Hearing induction loops in our branches to assist the hearing impaired.
- A textphone, which can be accessed by making a call through TextDirect, dialling prefix 18001 before the telephone number you want.
- Correspondence, statements, PIN advice and brochures available in large print, braille and audio formats.
- Chip and signature cards for customers who are unable to use a keypad or have difficulty remembering numbers.
- Card readers with a larger keypad and audio format for use with internet banking.
- Facsimile signature stamps for customers who have difficultly reproducing a consistent signature.
- Templates to help customers complete cheques and paying in slips.
In 2007, The Co-operative Bank introduced a £25m microfinance fund to support the development of small businesses in some of the world’s poorest countries. To date, they have lent to four microfinance schemes and supported microfinance institutions in 28 countries. In 2012, they agreed a new investment of $5m in a fund supporting microfinance institutions and social enterprises in Latin America, Eastern Europe and Asia.
No evidence found that the company invests in or lends at lower rates to financially excluded communities.
Environment
Co-operative banking Group’s environmental policy covers the key areas of climate change/energy efficiency, water use and waste management.
The environmental policy also contains a commitment to continued improvement in environmental performance.
Carbon Neutral
In 2012 The Co-operative Banking Group maintained its policy of going ‘beyond carbon neutral’ for the sixth consecutive year by offsetting its emissions plus an extra 10% of emissions to cover legacy issues (8% of total carbon offset).
Equal Opportunities
The Co-operative Bank's diversity policy takes into consideration the key equality issues of race, gender, sexuality, and disability.
Women on the Board
The Co-operative Banking Group:
2/12 women hold top level board positions (17%).
Voluntary Standards & Initiatives
The Co-operative Bank is a member of or signatory to the following relevant charters or initiatives:
- Opportunity Now and Race for Opportunity (The Co-operative Group)
- UKSIF (Co-operative Banking Group)
- The London Benchmarking Group (Co-operative Banking Group)
- Employer's Forum on Equality and Inclusion (Co-operative Group)
- Employers' Forum on Disability (Co-operative Group)
- Extractive Industries Transparency Initiative (Co-operative Insurance UK)
- ClimateWise (Co-operative Insurance)
- Carbon Disclosure Project Water Disclosure (Co-operative Financial Services)
Charitable Giving
The Co-operative Foundation is an independent charitable trust set up in 2000. The Foundation's current grant-making programme, Truth about Youth, aims to challenge and change negative perceptions about young people, by working with seven charities in cities around the UK. Has committed a total of £5 million since 2009.
Community Initiatives including Skills4Schools, Reading partners, StreetGames Young Volunteers, Offenders’ art exhibitions (invested £82,000), Supporting the homeless (donated £89,000).
Co-operative Bank
- Current Accounts
- Savings
- Credit Cards
- Loans
- Mortgages
- Investments
- Insurance (Home, Motor, Life, Pet, Health – through Co-operative Insurance)
- Private Pension Fund
- Student Current Account
Co-operative Bank
The Co-operative Bank plc.
P.O. Box 101,
1 Balloon Street,
Manchester,
M60 4EP.
