Barclaycard's Green Credit Card

There have been some so-called ethical investment funds in recent years and financial products that are environmentally friendly are becoming more popular and Barclaycard has launched its own "Breathe" credit card.

With this card, Barclaycard says it will donate half of all profits from the card to products which reduce carbon emissions, and at the same time customers benefit from special offers and lower rates of interest on ‘green’ purchases.

Barclaycard should be congratulated on its move, but is the card really any good?

It largely depends what type of customer you are. In common with all credit cards, it is best for you if you clear your balance every month, but if you do then you are actually not going to contribute towards the environment at all, as Barclaycard derives its profit from interest paid by customers who have an outstanding balance; quite the opposite in fact, because customers who do pay off every month actually represent a cost to the credit card companies for servicing their accounts. So, if you pay off your bill in full, you’ll be impacting Barclaycard’s profits and therefore reducing the amount donated to green products.

It would be better, if you pay your bill off every month, to take out a cashback credit card and make a donation of your annual payback money to the environmental cause of your own choosing. Another option would be to choose a charity card which sends a percentage of your annual spend to a charity.

If you do not pay off your balance every month, then you will find better deals on the market. The standard APR for the Breathe card is 14.9%, but that is reduced to 5.9% for rail or national bus tickets (transport in London is sadly excludced) purchased with the card. Barclaycard’s Simplicity card offers an APR of 6.8% on transfers and purchases, so, again, you could save cash and donate that as you please. Even better, choose a card with a zero percent rate on purchases for a period of time and donate some or all of your savings as you see fit.

The Breathe card does, however, have some attractive offers on green purchases. To cut air travel, there are some deals on UK holidays, such as 25% off holidays at Centre Parcs, and there is 10% off bicycles at Halfords.

Green retailers SoOrganic, ecoelectricals.co.uk and Natural Collection have money-off deals via the card and British Gas offer deals on insulation and heating.

Industry watchers Moneyfacts recommend that green customers ought to look for charity donation cards in preference. Although they think it is good news that such a big player as Barclaycard is supporting green causes, the deal is a surface-scratcher and ultimately it is the paying customer who will be giving to environmental causes.

Other truly green and ethical companies exist, such as Co-Operative Bank and Triodos.

If other key players in the personal finance market come forward with their own ideas there might be a real opportunity for green-giving products to make a true impact.

Tom Smith
9th July 2007