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
M&S Money
Green/Ethical Products
- M&S Ethical Fund
Ethical Lending or Insurance
M&S Money is a wholly-owned subsidiary of HSBC Bank. M&S Money operates retail banking only so ethical lending policies are not relevant in this instance.
Responsible Lending
1. Credit Lending
M&S Money offers unsecured credit (personal loans, credit cards) only.
In assessing applications for unsecured credit, the bank says that credit scoring ‘may’ be applied. This uses information supplied by the applicant as well as that obtained from credit reference agencies.
No information was found as to whether the bank has a policy to avoid or prevent offering unrequested increases in credit limits to customers.
2. Debt Warning
The bank issues pre-contractual warnings to customers stating that if they default on payments their credit rating may be affected.
It also refer customers to the FSA’s Debt Test which 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 difficulty.
3. Debt Management and Advice
The bank offers only generic advice to customers in financial difficulty and refers them to external debt advice agencies such as the Consumer Credit Counselling Service (CCCS), PayPlan, the National Debtline and the Citizens Advice Bureau.
The bank states that customers are invited to call should they find themselves in financial difficulty and it states that it deals with such customers on a case-by-case basis. No details of possible repayment restructuring or payment holidays for customers in financial difficulty were found. However, M&S Money offers a three month initial deferral period on personal loan repayment.
Financial Exclusion
M&S Money does not offer any products or services to the financially excluded nor does it or its parent company engage in partnerships with credit unions or other mutual organisations.
As it is a retail banking business only it does not offer microfinance or preferential lending to communities.
M&S Money makes some provisions for disabled customers by providing information on products in Braille, large print or audio cassette formats.
Environment
M&S Money is part of Marks & Spencer Financial Services, a wholly owned subsidiary of HSBC Bank plc.
HSBC’s environment policy covers the key areas of climate change/energy efficiency and waste management. The policy also contains a commitment to continued improvement in performance.
Carbon Neutral
The parent company’s business operations have been carbon neutral since 2005.
Equal Opportunities
The bank addresses the key issues of gender, race, disability and sexuality in its equal opportunities policy.
Women on the Board
The parent company, HSBC, reported 10.5% women on its board in 2007.
Voluntary Standards & Initiatives
Parent company, HSBC is a signatory/member of a number of charters and initiatives including:
Charitable Giving
HSBC donated 0.48% of its pre-tax profits to charity in 2007.
M&S Money
- Current Accounts
- Savings
- Investments
- Credit Cards
- Loans
- Mortgages
- Insurance (Home, Motor, Travel, Life, Pet, Wedding)
M&S Money
M&S Money
Customer Services Department
Kings Meadow
Chester
CH99 9FB
