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
Tesco Personal Finance
Green/Ethical Products
None
Ethical Lending or Insurance
No evidence of an ethical lending policy was found.
Responsible Lending
1. Credit Lending
Tesco Personal Finance offers unsecured credit only.
The bank runs both credit checking (with reference agencies) and scoring (using information provided by the customer).
No information was found on any policy to avoid or prevent offering unrequested increases in credit limits to customers.
2. Debt Warning
The bank warns customers to spend what they can afford and about having to pay monthly interest. It recommends using a credit card as a ‘budgeting tool’, rather than as a loan or as an overdraft, and not to use the card's spending limit as a benchmark. It further warns of potential damage to customers’ credit ratings by not making minimum credit card payments.
The bank’s website contains a link to the FSA’s Money Made Clear site (which includes a Debt Test) and also has a quick quiz to test if customers are using their credit cards responsibly.
The bank’s website also carries a section on bankruptcy and warns against using it as a way of clearing debt.
3. Debt Management and Advice
Apart from the section on bankruptcy, no other information or policies on payment default and handling payment problems were found. The bank does offer the possibility of a two month payment holiday, but specific details were not publicly available.
Financial Exclusion
Tesco Personal Finance does not provide a basic bank account or other service to the financially excluded, nor does it meet any of our other criteria i.e. it was not found to work with credit unions, provide access for disabled or other disadvantaged customers, fund microfinance projects or lend at preferential rates to deprived communities.
Environment
Tesco’s environmental policy addresses the key issues of energy efficiency, waste management and states it has a long term commitment to improved environmental performance.
Carbon Neutral
No appropriate pledge was found to make the bank’s business operations carbon neutral.
Equal Opportunities
Tesco’s diversity policy addresses the key issues of gender, race, disability and sexuality.
Women on the Board
No data found.
Voluntary Standards & Initiatives
Not by itself, but the parent company is member of:
Tesco Personal Finance
- Credit Cards
- Loans
- Mortgages
- Savings
- Insurance (Home, Motor, Travel, Pet, Life, Health)
Tesco Personal Finance
Tesco Personal Finance
PO Box 104010
George House (4th Floor)
36 North Hanover Street
Glasgow
G1 2YG
