Who wins in the game of green credit cards?

Posted by Duke on February 8 at 10:42 AM Most major credit card issuers are quickly moving into offering “green” credit cards that purport to give back to the environment by allowing users to channel a percentage of their spending towards purchasing carbon offsets and other environmental initiatives. Today the WSJ reported that GE, Bank of America and Meta Financial group are all launching such cards. The real question is who benefits and to what extent?

For corporations, the green cards are great tools for marketing green corporate governance, offering products that will appeal to both new and existing customers, and providing the pathway for alliances with creditable green organizations. 

However, at the end of the day, it seems that both the green organization and the consumer would be better off with a simple cash-back card used in the same manner.

Generally, green cards give 1% of total qualified purchases to these green initiatives whereas a general cash-back card gives you around 3%.  If a consumer charges $10k in a year, with a green card the green initiative receives $100.  With a regular cash-back card,  the consumer receives $300 that they would donate to a green initiative.  Right away the green initiative has gotten 3x the amount of money and if the if the green initiative happens to be a non-profit 501c3, the consumer can write off that $300 in a tax deduction to gain additional benefit. 

It is this sort of conflict that ultimately loses savvy consumers, and such conflict is both unnecessary and unfortunate.  If the offering bank employed simple adjustments to rebalance the benefits between itself, the consumer and the environmental initiative, they could not only differentiate themselves as a leader in the green sphere, but also create a more successful program by providing more money for their environmental partner.  Also, they would increase customer loyalty through leadership and thus increase the use of their product line.
Topics: branding, financial services, grassroots, philanthropy        SHARE: