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
First Direct
Green/Ethical Products
No evidence of any accounts, products or services aimed specifically at the financially excluded.
Ethical Lending or Insurance
Not applicable. First Direct does not offer commercial lending services.
First Direct is a division of HSBC Bank plc., which is part of the HSBC Group.
According to its website, HSBC Group aims “to lend and invest responsibly, avoiding projects where the potential for social and environmental damage outweighs the economic benefits.” As such, the group “exercises caution” when providing financial services to the following sectors:
- Chemicals
- Defence equipment
- Energy
- Mining and metals
- Freshwater infrastructure
- Forest land and forest products
HSBC Group also monitors its customers’ compliance levels and the scale of potential impacts. It has outlined detailed sustainability policies and utilizes the Equator Principles as a starting point for assessing whether to do business with the above sectors. The group states that “policies apply to all lending and other forms of financial assistance, primary debt and equity markets activities, project finance and advisory work.”
HSBC has specialised teams to respond to both central and regional lending needs and targets. Transactions are initially assessed against the requirements of the Equator Principles by its Project and Export Finance teams. The proposals are then submitted for review and approval by the credit risk teams. Regular reports on the management of sustainability risk are prepared for senior management, including quarterly reports for the Risk Management Meeting of the Group Management Board.
HSBC Group also monitors its customers’ compliance levels and the scale of potential impacts on an annual basis.
HSBC provides the following examples of its ethical lending policy in action in its 2012 Sustainability Report:
- In 2012, the Group declined two potential transactions which would have adversely affected World Heritage Sites
- HSBC was asked to provide financial support to a building project along the Mexican coast. After utilizing the sustainability risk framework, the Group discovered that it was adversely affecting protected mangrove swamps, and was therefore noncompliant with its policies. HSBC declined to be associated with the project.
HSBC’s sustainable risk policies “apply to all lending and other forms of financial assistance, primary debt and equity markets activities, project finance and advisory work.”
In 2012, HSBC signed up to the UN’s Principles for Sustainable Insurance, a global sustainability framework and initiative of the United Nations Environmental Programme Finance Initiative. Its aim is. Its aim is to help insurance companies manage their environmental, social and governance (ESG) challenges. The principles ensure that signatories embed ESG in decision-making and work together with clients, partners and governments to raise awareness of ESG issues. See page 3.
Human Rights
Not applicable. First Direct does not offer commercial lending or insurance services.
According to its Mining and Metals Sector Policy, HSBC has a restricted appetite for supporting individual operating sights where there are credible allegations of human rights violations.
HSBC’s Ethical and Environmental Code of Conduct for Suppliers of Goods and Services states that “HSBC expects suppliers to respect the human rights of their employees and to comply with all relevant legislation, regulations and directives in the countries and communities in which they operate.” Respect for human rights covers areas of forced labour, child labour, working hours, discrimination, labour unions, disciplinary practices, and work environment.
HSBC expects suppliers to have management processes in place to ensure compliance. HSBC may randomly review a supplier’s policies, procedures or any other document related to the HSBC Code of Conduct. In some cases, this may include an on-site audit.
Financial Exclusion
No evidence of any accounts, products or services aimed specifically at the financially excluded.
No evidence that the company provides direct financial support to or engages in partnerships with Credit Unions and CDFIs (Community Development Finance Institutions).
First Direct states that its website adheres to accessibility guidelines.
As it is a retail banking business only, First Direct does not offer microfinance or preferential lending to communities. However, its parent company, HSBC Group works with a number of large microfinance organisations to support their funding and development programmes and also works directly with microfinance providers in a number of countries.
No evidence found that the company invests in or lends at lower rates to financially excluded communities.
Environment
HSBC Group’s Climate Policy covers the key areas of climate change, energy efficiency, water use and waste management.
First Direct’s parent company, HSBC Group, is committed to continued improvement of its environmental performance. The Sustainability Report tracks yearly progress against its long-term environmental goals. These goals cover travel reduction, paper usage reduction, annual energy consumption reduction, increased recycling and waste reduction, green building programmes, and renewable energy consumption.
Carbon Neutral
HSBC was the first bank to become carbon neutral in 2005. However, in 2011, following a review HSBC decided that from 2012 the business will no longer be carbon neutral.
HSBC has a goal to reduce its annual carbon emissions per employee by one tonne from 3.5 to 2.5 tonnes by 2020.
Equal Opportunities
First Direct is a division of HSBC Bank plc, has a diversity policy that takes into consideration the key equality issues of gender, ethnicity, disability, religion, sexuality and age.
Women on the Board
HSBC Holdings, Plc:
4/16 women hold top level board positions (25%)
Voluntary Standards & Initiatives
No membership of any relevant charters or initiatives found for Firs Direct. However, its parent company, HSBC Group, is a member of or signatory to the following relevant charter or initiatives:
- Climate Change Group, Transparency International UK, UN Global Compact, Principles for Responsible Investment (HSBC Global Asset Management);
- Equator Principles (Member of Steering Committee); The Wolfsberg Principles; Carbon Disclosure Project; UNEP Finance Initiative; OECD Guidelines for Multinational Enterprises; Kyoto Statement of the Geneva Association (HSBC Holdings plc)
- Global Business Coalition on Health; Global Business Coalition on HIV/AIDS; Global Sullivan Principles of Corporate Social Responsibility (HSBC Group);
- UKSIF and a member of Business in the Community; Opportunity Now and Race for Opportunity initiatives from the Business in the Community; Employers' Forum on Equality and Inclusion and Employers' Forum on Disability Members; (HSBC Bank)
- Extractive Industries Transparency Initiative (HSBC (UK))
- UN’s Principles for Sustainable Insurance
Charitable Giving
First Direct works with Childline, and has raised £4.7 million for the charity in the last four years. In 2013, First Direct is supporting the ChildLine Schools Service, which has been set up to give primary school children the awareness they need to recognise abuse and seek help sooner.
First Direct
- Current Accounts
- Savings
- Investments
- Credit Cards
- Loans
- Mortgages
- Insurance (Home, Motor, Travel)
