Barclaycard Breathe MasterCard – green or just green wash?
Michelle Slade, analyst from Moneyfacts.co.uk – the money search engine, investigates:
“Today sees the long awaited full launch of the new ‘green’ credit card from Barclaycard. For some time now we have known this product was coming, but until now the full details of rates, deals and fees have not been known.
“Barclaycard’s green stance is innovative in the credit card market. It is offering to donate a minimum of £1 million in year one and for subsequent years 50% of the cards profits to carbon reduction projects. Additionally preferential rates are available when spending on greener travel options and other selected deals, for those who don’t repay their balance in full.
“Co-operative Bank and Smile are the only other main green/ethical players in the credit market, using a more traditional donation scheme. The more you spend the more is donated to your chosen cause.
“Barclaycard’s Breathe card is a certainly a step in the right direction, but customers taking this deal must take the time fully to understand both what deal they are receiving and also whether the way they intend to use their card will actually help green causes.
“The Breathe MasterCard offers a slightly cheaper than average standard purchase rate of 14.9% and a balance transfer deal of 0% for 6 months up to £5K and 6.9% for life on further borrowing. A balance transfer fee of 2.5% (min £6.25, max £125) is also charged.
“Overall the standard features and rates on this card are fairly run of the mill. Better deals on purchases and introductory deals can easily be found. But as with most financial products which offer a donation scheme or have a green / ethical programme, it is unlikely that the product will also offer best buy features – it is usually one or the other.
“Taking this into account, how green is the Breathe Card, or is it more of a green wash? It is operated online, saving paper on statements and envelopes, and the card is manufactured using greener materials, but we must remember that it is a percentage of profit made that Barclaycard is looking to donate.
“Take for example a customer who repays their balance in full each month, or just makes use of the 0% deal and no more. By paying no interest, these customers will be loss makers for Barclaycard, especially when you take into account the operational and administration costs of running a card. So not only will these customers not make any money for Barclaycard, their cost burden will also eat into the overall profit set aside for carbon reduction programmes.
“If you take into account the other type of card user, those who carry over a balance each month. Great, these customers are making Barclaycard profit, by paying interest each month, which can be given to green projects – but only at the cost of hurting their own pockets. You could argue that it would be better to grab yourself the best deal, save money on interest and use this cost saving to donate to your own chosen cause. At the end of the day it is down to the consumer either to donate themselves, or if they don’t have the time or inclination, then at least look to sign up for a ‘green’ product that will donate based on their usage.
“It’s great to see such an influential player showing a conscience and taking steps to help the green cause. But this deal only scratches the surface, and perhaps has more publicity appeal then true green credentials. Ultimately it’s the borrowers that will fund Barclaycard’s green giving.
“There are some truly green and ethical financial companies out there, such as the Co-operative Bank and Triodos. What is needed now is for the other big players in personal finance market to help make a real difference by launching their own ‘green giving’ products.
“Within the next couple of weeks Moneyfacs.co.uk will be launching an ethical section on its website which will be the single most comprehensive source for information on ethical finance products. This will help customers decipher the true green deals from the green wash.”
Moneyfacts Group
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