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
Virgin Money
Green/Ethical Products
Virgin Money operates a Climate Change Fund (available to ISA savers) which seeks to invest in renewable energy companies. The fund’s managers have explicitly stated that this fund does not apply any socially responsible investment criteria to the investment process.
Ethical Lending or Insurance
No evidence of an ethical lending policy was found.
Responsible Lending
1. Credit Lending
No evidence of credit checking with reference agencies was found, only the following statement re credit limits: ‘The limit given is based on your personal circumstances. If you’ve got a high salary and low debts, you’re more likely to get a higher credit limit.’
No policy was found to avoid or prevent offering unrequested increases in credit limits to customers.
2. Debt Warning
No warnings were found with regard to the consequences of payment default. Nor was any reference to the FSA Debt Test or similar found. This test is designed to help customers find out whether you have, or are likely to have, problems with borrowing. It also has tips on what to do if customers find themselves in difficulties.
3. Debt Management and Advice
No information or policies on payment default and handling payment problems were found. Similarly no information with regard to the possibility of payment holidays/breaks was found.
Financial Exclusion
Virgin Money does not offer any products or services to the financially excluded. We found no evidence that it engages with credit unions or other mutual organisations; that it funds microfinance projects or that it lends at preferential rates or invests in deprived communities.
In terms of access, its website is accessible to customers with disabilities. It also provides literature in Braille, large print and audio tape, as well as offering Typetalk services.
Environment
No public data on the specifics of Virgin Money’s environmental policy was found.
Carbon Neutral
No evidence of a pledge was found, however, the parent company, the Virgin Group, reports that all ‘key’ UK office sites are run on renewable energy and that extending this across all ground operations is being considered.
Equal Opportunities
The company’s policy addresses the key issues of gender, race, disability and sexuality.
Women on the Board
No data found.
Voluntary Standards & Initiatives
None
Virgin Money
- Credit Card
- Loans
- Savings
- Investments
- Mortgages
- Pensions
- Insurance (Home, Motor, Travel, Pet, Life)
Virgin Money
Virgin Money
The Service Quality Team
Discovery House
Whiting Road
Norwich
NR4 6EJ
