How to find and compare ethical credit cards

More and more Australians are prioritising sustainability as well as ethical practices from their financial providers, and the same is true for choosing your credit card. Let’s explore whether you can go green for your credit card and how to best compare these ethical options.

What is an ethical credit card?

An ethical credit card refers to when a credit card issuer chooses to invest and support sustainable industries and avoids making investments in areas considered ‘unethical’, such as:

• Tobacco
• Fossil fuels
• Gambling
• Weapons
• Social harm
• Live animal export
• Environmental destruction
• Contributors to carbon emissions

By identifying ethical credit card issuerss, customers can ensure they are keeping their finances linked to providers that align with their values. After all, if you morally oppose something but keep your cash or access credit with a lender who invests in said thing, you could help to fund and support the continuation of it.

This is a common practice when it comes to superannuation funds, as the money you squirrel away for your retirement is literally being invested into different areas and industries. Ethical super funds generally will advertise that they meet good environmental, social and governance (ESG) standards, making it relatively easy to identify one. They may even come with badges or certificates, like the tobacco-free verification stamp.

How to find ethical credit cards

When it comes to finding green credit cards or ethical credit cards, you may need to do a little research as these labels are not as obvious as superannuation funds. Here are some helpful options to find ethical credit cards:

• Fossil fuel investors

MarketForces offers Australians a table outlining the banks and their subsidiaries that have funded fossil fuels since 2016. This includes some of the biggest banks in the country. It also outlines the banks that have no records of funding fossil fuels since 2016, including Bendigo and Adelaide Bank, Bank Australia, Great Southern Bank and Beyond Bank.

• Nuclear industry investors

Another helpful website for navigating which financial providers meet your moral standards is dontbankonthebomb, which offers a list of global financial institutions that have recently invested with corporations that may produce technology or hardware then used to make nuclear weapons.

• Check issuer websites

Typically, if a credit card issuer does not invest in unethical or unsustainable industries, it will make note of this on its website. This is a no-brainer given that it is a major attraction for some customers and helps to set them out from the market. If you find a credit card that looks appealing, it’s worth checking the issuer’s website for more information or even speaking with a customer service representative for specific details, such as whether the issuer invests in companies that practice live animal export.

Almost three-quarters of Australians (72%) have expressed concern that their financial provider is lying about their green credentials and practicing ‘greenwashing’. It’s crucial that you take the time to find a financial provider that aligns with your morals and beliefs – and practices what it preaches.

Are there any ethical credit card issuers?

Some financial providers have also built ethical investing into their ethos. Bank Australia has done this since its foundation, with a responsible banking policy that states it has not and will never invest in:

• The fossil fuel industry
• The live animal export industry
• Intensive animal farming
• Animal testing
• The arms industry
• Gambling
• Tobacco

It is also the first Australian bank to join the Global Alliance for Banking on Values and is a certified B Corporation.

Another Australian credit card issuer that prioritises ethical banking and eco-friendly finance is Teachers Mutual Bank. It advertises that it follows a model of socially responsible banking, stating that it believes in “transparency, and benchmark ourselves against world leaders in sustainability”.

Teachers Mutual Bank has been named one of the ‘World’s Most Ethical Companies’ for nine years in a row, as per the Ethisphere Institute. And in 2022, it was one of only five banks globally to be recognised.

Keep in mind that these are just two examples of sustainable credit card issuers, and it’s still worth comparing your options across the market to ensure you find a lender that best suits your needs.

It’s also important to compare more than just the card issuer when choosing your next credit card. You’ll also want to ensure the interest rates, fees (if any), number of interest free days and rewards programs (if any) suit your financial situation.

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