Your credit card can help save the planet.
That's the message companies are pitching to consumers as they roll out new credit cards designed to cash in on people's worries about global warming.
These "green" cards allow users to channel a percentage of their spending toward efforts to cut greenhouse-gas emissions. General Electric Co.'s Earth Rewards MasterCard, launched in July by the company's GE Money unit, targets as much as 1 percent of spending on the card toward emission-reduction projects. Bank of America Corp. followed in November with its green card, Brighter Planet Visa, which matches every dollar spent with one point that can be accumulated and traded in for "carbon offsets." Carbon offsets are meant to reduce the effect of emissions made somewhere else — such as by planting trees. Additionally, Storm Lake, Iowa, savings bank MetaBank, a unit of Meta Financial Group Inc., in August launched its GreenPay MasterCard, which allows users to accumulate carbon offsets with each purchase.
With the Bank of America card, accumulated offsets are funneled to various projects its partner, Burlington, Vt., startup Brighter Planets, deems deserving. Each month, cardholders will be notified how many carbon emissions have been mitigated with their contributions. With the
MetaBank card, individuals earn offsets that they can then use to mitigate their carbon footprints.
Yet offsets have recently come under criticism in the United States, where the market is strictly voluntary. Environmentalists are calling for greater transparency in terms of verifying green projects that are eligible for offsets. Some critics charge that offsets don't serve to reduce overall emissions, and should be the last resort for companies and individuals.
Green cards have been available in Europe for several years and have attracted a sizable following, tapping into the region's well-established environmental movement. Their move into the United States comes amid mounting concerns over climate change and impending mandatory restriction on carbon emissions.
By some measures, though, the new cards aren't as generous as standard cash-back cards, some of which pay back the card user up to 3 percent of spending. By contrast, the environmental cards contribute less than 2 percent of purchases to green initiatives.
For financial institutions, adding green cards to their product lines is a way to boost their corporate environmental credentials. Last year, Bank of America and Citigroup Inc. each committed to spend tens of billions of dollars to reduce their corporate carbon emissions and invest in alternative-energy projects.