In keeping with a growing trend, Barclaycard has issued a new green credit card. Barclays has pledged to donate fifty per cent of the profits generated through the new card, called ‘Breathe’, to charities working to combat climate change. However, many experts have voiced worries and it is questionable as to whether the Barclaycard will benefit consumers’ finances. Critics have accused banks of ‘jumping on the climate change bandwagon’; the 'Breathe' card it has been argued is no more than a clever marketing gimmick on the part of an institution wishing to raise its profit margins.
The Barclaycard encourages cardholders to engage in spending patterns which are friendly to the environment. It provides customers with discounts on loft and cavity wall insulation as well as greener forms of spending and holidays in the United Kingdom. Cardholders are also encouraged to travel by public transport through lower interest rates on purchases of bus and rail tickets. Cardholders will also be able to manage their finances online, thereby precluding the need for paper-based statements. The card itself is made from environmentally-friendly plastics. Finally, Barclays will donate 50% of the profits created to the charity organisation, PURE.
The 'Breathe' card has received some positive feedback. The price comparison website, www.moneysupermarket.com has praised the credit card stating that it provided consumers with "a genuine breath of fresh air in the credit card market". The card charges an interest rate of just 14.9% which is significantly lower in comparison to other credit card providers. However, the rationale behind the card is somewhat questionable. Profits on credit cards are generated primarily through interest charges on late payments. Those consumers who pay their credit card bills before the interest-free period has lapsed will not be making a contribution to carbon reduction programs. Barclays will effectively make a loss on these consumers because they must make charity contributions based on the fact that these individuals hold the Breathe card. However, as card payments are made on time, there is no opportunity for the bank to generate a profit on the custom of these cardholders.
Barclaycard ‘Breathe’ is not the first such green card to enter the market. Pro-environment credit cards have been a growing trend in recent years as younger users become more conscious of the threat posed by climate change. A number of other financial institutions such as the Co-operative Bank offer similar cards; the organisation donates part of its profits to charities chosen by cardholders. In addition, HSBC provides consumers with a green option on its current accounts. Elsewhere, the American Express Red credit card sees part of its profits donated to charities working to fights AIDS in Africa.
For more details about the ‘Breathe’ credit card, discounts and participating dealers, click here
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