As more of us look to do our part to help protect the environment and society, an increasing number of people are turning to ethical banking. Many are also looking for an ethical credit card, so here’s what you need to know.
Ethical banking is a way of managing your finances without supporting environmentally damaging activities and industries.
When you save using a bank, banks will invest your money in various industries to make more money. Sometimes banks will invest into industries which harm our planet including the oil, tobacco and weaponry industries.
Ethical banks, on the other hand, invest your money in socially and morally positive ways. For example, some of the ethical practices employed by banks could include supporting charity work, reducing fossil fuel emissions and investing in renewable energy to help tackle climate change.
Though the credit cards themseleves may not appear ethical, the card provider might be. Ethical providers may refuse to invest in industries or commodities that could be causing harm to society or the planet, instead they help to fund projects which support local communities or the environment.
However, while many ethical banks are focused on green initiatives, other ethical banks are primarily focused on transparency and top-notch customer service. So an ethical credit card could also be one with no hidden fees and fairer charges for the consumer.
To find an ethical credit card, you’ll need to shop around and look for a provider that is working to have a positive impact on the environment or society.
Many ethical banks will clearly state on their website what they invest in, which should help guide your decision. However, the Good Shopping Guide also lists which banks and building societies are involved in ethical practices. Each provider is scored based on factors such as environmental issues, animal welfare, responsible lending and investment plus ethical accreditation.
Keep in mind that not all of these providers will offer credit cards, but many will, so it’s a good place to start. You can also search for your chosen bank on YourEthicalMoney.org, which will list your bank’s ethical credentials.
Looking for a ethical purchase card? Or maybe an ethical balance transfer card? Below we have selected cards from ethical banks and rated which ones are the best based on the card type.
Finder's pick
0% interest on balance transfers
0% interest on purchases
Representative APR
Foreign transaction charge
| Minimum income | 5000 |
|---|---|
| Availability | Available to existing customers |
| Foreign usage charge (EU) | 0% |
| Cash advance fee | 19.9% |
Finder's pick
Representative APR
Account fee
0% interest on balance transfers
0% interest on purchases
| Availability | Available to new customers |
|---|---|
| Foreign usage charge (EU) | 2.95% |
| Cash advance fee | 28.95% |
Finder's pick
0% interest on balance transfers
0% interest on purchases
Representative APR
Account fee
| Minimum income | 10000 |
|---|---|
| Availability | Available to new customers |
| Foreign usage charge (EU) | 2.75% |
| Cash advance fee | 26.9% |
To give you a helping hand, we’ve outlined 4 of the top ethical credit cards below:
Tymit works slightly differently to traditional credit cards as it lets you spread the cost of your card purchases over a number of instalments. Purchases that are not paid off in full at the end of the month can be split into 3, 6, 12 or 24 equal instalments, which can be managed via the app. Through doing this, Tymit says customers can say goodbye to the “minimum payment trap, confusing interest charges and hidden fees” that often apply to standard credit cards.
You’ll still pay interest on the purchase you put into instalments, but it’ll be easier to keep your debt under control. You also won’t be charged any foreign currency transaction fees when you use your card abroad. Read more in our review.
The Co-operative Bank offers 3 different credit cards. These include a balance transfer credit card, a 3-year fixed rate credit card offering a low rate of interest on both balance transfers and purchases for three years, plus a Members’ credit card that offers cashback.
The Co-operative Bank states that it is committed to ensuring its fees and charges are fair to its customers. It also seeks to support charities and organisations involved in the Social Enterprise sector, small businesses and organisations whose activities promote a healthy environment and businesses that promote animal welfare.
Note, however, that as of 2017, The Co-operative Group no longer holds a stake in the Co-operative Bank.
Nationwide is one of the UK’s established building societies. It is not listed on the stock market, which means it is not accountable to shareholders. Instead, it is accountable to its members (those who bank with it) who have a say in how it is run.
Nationwide’s credit card does not charge an annual fee and there are no fees for making purchases abroad either. Customers can choose between a balance transfer offer or an “all-rounder” offer that offers 0% on both purchases and balance transfers.
Metro Bank aims to be a different kind of high-street bank, offering simpler products with no hidden charges. Opening hours are longer than most high-street banks and include weekends. There’s no need to book an appointment if you need help – simply walk into your nearest branch.
Metro Bank’s credit card comes with one low rate of 14.9% APR and no monthly fee. It also offers fee-free foreign transactions in Europe and, if you pop into a local branch to apply, the bank will print your credit card there and then so you can use it straight away.
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