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Credit cards used to come in standard, gold and platinum.
Now there's green, too.
Following other businesses that are going green, the
credit card industry is tapping this market. GE, Bank of America,
Wells Fargo and Brighter Planet all have new environmentally friendly
credit cards on the market or in the works. If you want to save
the whales, offset CO2 emissions or contribute to another "green"
cause, it is now as simple as swipe and sign.
How green cards work
Environmentally friendly credit cards are affinity cards issued by a credit card company. The card issuer donates a portion of your purchases (typically 1 percent through a rewards program) to a green cause. Sometimes the consumer gets to choose the specific cause, but most often the funds go to a general fund from which contributions are made to a variety of causes of the affiliate company's choosing.
Find the best cause for you
The Internet is an easy way to target a green cause that appeals
to you.
"I think especially consumers who are environmentally
conscious will want to make sure they're supporting good causes;
causes they are familiar with; causes that they feel comfortable
with," says Curtis Arnold, founder of CardRatings.com.
Arnold says that the waters can get muddy when trying
to research which organizations benefit from the donations from
the credit card issuer.
He says the best thing to do is ask them directly.
Ask exactly what causes or products you can support that are environmentally
friendly. Some of the issuers have their catalogs online and will
allow you to look at them.
"Some will say you will just have to get the
card and then find out. Don't ever settle for that answer,"
he says.
Many credit cards add green causes as an option to their existing rewards program -- meaning your donations go to one pot for one or more causes, not a specific cause that you might want to support.
"Really look at (the card) with a magnifying
glass to find out some more information, because, ideally, you want
them to give you the ability to support the cause of your choice,"
Curtis says.
Do green cards stack up?
Going "green" does have some slight drawbacks. There are
certainly more competitive cards if you do an apples-to-apples
comparison.
Generally, you can expect an interest rate of about
1 percent higher than other credit cards, Arnold says. Otherwise,
the terms and conditions -- such as over-the-limit, balance transfer
and late fees -- are comparable to those of other credit cards.
With the Chase
World Wildlife card, which donates proceeds to the World Wildlife
Fund to help save endangered species and protect endangered habitats,
the variable rate ranges from 14.24 percent to 23.24 percent. The
interest rate for the GE
Money Earth Rewards card, which automatically contributes up
to 1 percent of card purchases to buy greenhouse gas emissions offsets,
is slightly more competitive, with the interest rate ranging from
12.99 percent to 18.99 percent.
Naturally, the better your credit, the better your
interest rate.
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