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
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Credit Card Provider
Sainsbury’s Bank
Green/Ethical Products
None
Ethical Lending or Insurance
No evidence of an ethical lending policy.
Responsible Lending
1. Credit Lending
Sainbury’s Bank offers unsecured credit only.
With regard to running checks before issuing credit, the bank states that it uses information supplied by loan applicants in a credit scoring process as well as making enquiries about the customer with credit reference agencies and fraud agencies.
According to publicly available data, credit card customers are subject to the credit scoring only. Results are used to determine the card’s maximum credit limit.
No evidence was found of a policy to avoid or prevent offering unrequested increases in credit limits to customers.
2. Debt Warning
On its website, the bank warns customers not to ‘neglect’ their loans and to avoid borrowing more than they need. It refers customers to the FSA Debt Test and budget calculator to find out if they are in a position to borrow.
3. Debt Management and Advice
No policies on payment default and handling payment problems were found. The bank does offer the possibility of a payment holiday of three months at the start of a loan term. Interest continues to be accrued during this holiday.
Financial Exclusion
No evidence of policy or provisions for financially excluded customers.
Environment
The policy information found relates to retail business and related transport/deliveries and not full company operations.
Carbon Neutral
No satisfactory pledge regarding making business operations carbon neutral was found.
Equal Opportunities
The equal opportunities policy covers the key areas of gender, race, disability and sexuality.
Women on the Board
33% of members of the parent company's board are women.
Voluntary Standards & Initiatives
None specific to banking found.
Sainsbury’s Bank
- Credit Cards
- Loans
- Savings
- Investments
- Insurance (Home, Motor, Travel, Pet, Life, Identity Theft)
- Students Contents Insurance
