Do Eco-Friendly Credit Cards Make a Difference? Here’s What To Know, According to Sustainable-Finance Experts

However you pay for it, buying new stuff is generally not a boon to the environment. Even if an item is recyclable or compostable once you’re done with it, the journey it took to get to you in the first place almost certainly involved some environmental impact. While the clearest solution is to buy less (or even try to buy nothing new at all), so long as you’re buying anything, it’s worth considering not only the lifecycle of the product, but also the source of the money you’re using to purchase it, since many traditional banks use payments and deposits to fund fossil-fuel energy. That’s where eco-friendly credit, debit, and charge cards are working to help you reduce the effects of your spending, both at the point of purchases and between them.

It’s worth noting that a bank’s investments can have a bigger eco impact than any one person’s purchases simply because the quantities tend to be larger. So, the investing activity of the bank(s) where your money is sitting can factor into your environmental footprint to an even greater degree than what you actually buy.

“If you were to trace where carbon emissions come from, you’d find a lot of fossil fuels. And if you were to then trace the money that underlies fossil-fuel extraction, you’d find almost all of the major banks,” says Sabelo Narasimhan, chief campaigns officer at Drive Agency, the coordinating organizing partner of the Bank for Good Campaign. “Over the past four years, the world’s 35 biggest private-sector banks have poured $2.7 trillion into fossil fuels.” And that money goes toward things like fracking (which leaks greenhouse gasses) and building pipelines that pollute waterways and endanger the rights of Native Americans, adds Narasimhan.

“If you were to trace the money that underlies fossil-fuel extraction, you’d find almost all of the major banks.” —Sabelo Narasimhan, sustainable-finance expert

Because almost every major bank is involved in these types of investments, eco-friendly affinity cards released by these banks (for example, the card issued by U.S. Bank with REI or the one previously issued by Bank of America with the World Wildlife Fund) are mostly an example of greenwashing, or making claims about sustainability without really substantiating them. While these affinity cards typically donate a small amount to an eco-friendly charity, the bank they’re issued by have not committed to not also funding fossil fuels.

As a result, you’re not going to get the most eco-friendly bang for your buck, so to speak, with any major bank’s green affinity card. But, on the other hand, a selection of offerings from big-bank alternatives have either committed to investing funds in a more eco-responsible way or are designed to help you slash your carbon footprint from the moment you swipe. Below, sustainable-finance experts walk through some of these eco-friendly credit, debit, and charge cards, and break down how they actually stand to benefit you and, just as importantly, the planet.

3 ways eco-friendly credit, debit, and charge cards may reduce your environmental impact

1. Not funding fossil fuels (and funding green energy instead)

As noted above, one of the biggest eco downfalls of spending and saving with a traditional credit card is the fact that your payments are often being invested in Earth-harming energy. Switching to a credit card from a bank that’s committed to not funding fossil fuels will majorly reduce your overall impact; a few that fall into that category include Amalgamated Bank, Beneficial State Bank (which issues cards to folks in California, Oregon, and Washington), and TCM Bank, whose Green America Visa allows you to direct a portion of every purchase to the environmental and social-justice nonprofit.

In the realm of debit and charge cards, you have even more options; the vetted list at Bank for Good only includes banks that don’t fund fossil fuels, and in many cases, do much more to support the environment and the communities in which they operate. For example, certain neobanks (which are fintech banking startups operating exclusively online) like Ando and Atmos put deposits toward green initiatives like renewable energy (wind, water, and solar), regenerative agriculture, sustainable infrastructure, and electric transportation. In the case of Ando, a transparent dashboard on the app shows you a breakdown of exactly what eco projects your money is funding, and with Atmos, you’ll see just how much carbon you’re sparing the environment, based on the green-energy initiatives your money is supporting.

2. Offsetting carbon emissions

Because emissions of greenhouse gasses like carbon dioxide are the main eco issue inherent to the manufacturing and distributing of the products we buy (in fact, a 2015 study found that the stuff we consume is responsible for more than 60 percent of emissions globally), certain eco-friendly card companies are centered around offsetting carbon for every purchase. One of the simplest ways to do that is through reforestation efforts—given that trees essentially suck carbon out of the air—which is why several card companies offer programs designed around planting trees to help neutralize the eco impact of purchases.

For example, Aspiration plants a tree for every purchase made with the Aspiration Zero credit card and lets you round up to the nearest dollar to plant a second one, too. (That has the added upside of supporting communities around the world with more fair-labor jobs, as well.) Currently, the company’s planting locations include Kenya, Mozambique, Madagascar, Honduras, Brazil, and the U.S., according to Aspiration’s CEO and co-founder Andrei Cherny, who notes that trees can take up to 18 months to be planted from card swipe to dirt. Similarly, Ando recently launched a tree-planting program for its debit card (one swipe equals one tree in the ground) funded by rounding up purchases to the nearest dollar.

3. Encouraging you to make more sustainable purchases

While offsetting carbon can work to negate the impact of what you buy, buying something with less of a carbon footprint from the jump, if you can, is often the best choice. Why not keep more carbon out of the atmosphere at the get-go, rather than aim to sequester it later? That’s the logic behind the newly released eco-friendly charge card FutureCard, which offers 5 percent cash back for items that have a lower carbon footprint than the most common alternative—for example, a bikeshare versus a rideshare, or a meat-alternative instead of a meat—and 1 percent for everything else. The card is designed that way to incentivize Earth-friendly choices every time you go to swipe it.

According to FutureCard co-founder Jean-Louis Warnholz, there are about 50,000 qualifying merchants on the FutureGreen selection of products entitled to the 5 percent cash back benefit. To curate this list, they teamed up with climate researchers and used tools like the Life Cycle Sustainability Assessment (LCSA) to create an algorithm that holistically measures the carbon emissions of a product or service “from innovation, supply chain, and manufacturing through to shipping and everyday use,” says Warnholz. The technology can even differentiate between product lines of a particular brand. “For example, if you buy a new pair of jeans from Levi’s, you get 1 percent cash back, but if you buy it from Levi’s SecondHand, you get 5 percent,” he says.

Because FutureCard functions as a charge card that you simply connect to your bank account (rather than a credit card), there’s no credit pull required to get FutureCard—which also expands its accessibility.

Ultimately, making the move to any one of the eco-friendly options above would be worthwhile, given the increasingly rapid pace of climate change and the responsibility incumbent on all of us to do whatever we can to slow it down. In the future, we can expect the list of eco innovations around spending and saving to grow—alongside awareness of just how much consumerism and big-bank investing is fueling the issue at hand.