What is it that you want from a credit card? The opportunity to earn rewards, perhaps? Maybe you’re drawn to the perks on offer, so you choose cards based on their ability to provide you with a more luxurious way to shop and travel? Whether it’s intro offers you look for, or simply access to credit, you can easily find your match within the vast array of credit cards currently on the market.
But what about brand? If you’re like the majority of Aussies out there, you’ll likely stick to brands you know when choosing a credit card. Unsurprisingly, the Big Four hold the largest market share within the Australian credit card market, with CommBank taking out the top spot, followed by Westpac, ANZ then NAB, and Citi pulling up in fifth. While there is something to be said for choosing a card from a big bank – particularly with regards to the selection bigger banks tend to offer – it can pay to look beyond those big brands to see what the little guys have to offer.
Want to give back to your community by joining a credit union or member-owned bank? Want to ease your social conscience by choosing a card provider that focuses on ethical values as it invests in good? Want to save the planet as you tap and go? From sustainability to ethical banking, these are values you can find in your card provider when you look beyond the brand to seek out the little(r) guy.
What to Look for in a Card
Okay, so you want to apply for a credit card. What should you be looking for? Let’s start with the basics. This is our ‘big four’, if you will: annual fees, interest, rewards and extras. No matter what type of credit card you’re interested in, whether you want a big brand card or a card from a smaller brand most have never heard of, these are the most important factors to consider.
One of the first things to think about as you compare credit cards is how much each card will cost to keep in your wallet.
What should you look for? First up, annual fees. This is the fee you will pay each year, ongoing. Some cards have no annual fees, while others charge hundreds of dollars. Cards with higher annual fees tend to balance out that cost by offering more in extras and rewards. The key is to find a card that you get more from in terms of value than you pay out in annual fees.
What can the little guy offer? While it’s not always the case, you may find you pay less in fees when you opt for a credit card from a smaller brand. Member-owned banks and credit unions in particular focus on lower fees, both in terms of annual fees and other costs, such as late fees. If you want to keep costs down, choosing a card from a provider such as this could make that happen.
Keeping costs down across the board, the ME Frank Credit Card has no annual fee and a low rate of 11.99% p.a. on purchases, cash advances and balance transfers. What you will tend to find on no annual fee cards from bigger brands are savings on annual fees, paired with a much higher interest rate.
Another way card providers make their money is from the interest they charge. Credit cards charge interest on purchases, balance transfers and cash advances, with rates reaching 22% or 23% p.a. in some instances.
What should you look for? Whether a card’s interest rate matters to you will really depend on how you use your card. If you clear your balance each month, you will avoid paying interest and can choose a card with a higher rate if you so wish. If you carry a balance, however, choosing a card with the lowest possible rate should help you keep costs down as you keep a tighter rein on your debt.
What can the little guy offer? Similar to annual fees, the interest on cards from smaller brands can be lower, particularly with member-owned banks and credit unions. While ‘low rates’ on cards from bigger brands may start at 13% or 14% p.a., true low rate options can be found within member-owned institutions with rates as low as 8% or 9% p.a.
As an example, the G&C Mutual Bank Low Rate Visa Credit Card has a super low ongoing purchase rate of 7.49% p.a., while the Auswide Bank Low Rate Visa Credit Card has a rate only slightly higher at 8.05% p.a.
Credit cards that earn rewards can be particularly enticing. With an assortment of rewards programs on the market – and an even bigger variety of rewards cards to choose from – selecting the right card can be tricky.
What should you look for? Across the board, rewards cards are just not as rewarding as they once were. That means you need to put particular effort into choosing a card that rewards you. Taking into account each card’s annual fee, earn rate and points cap, compare the options to find the card that provides the most value on your spending.
What can the little guy offer? As we mentioned earlier, big brands tend to provide a larger selection of cards to choose from. While smaller brands certainly offer rewards cards, their range may not be as extensive – especially if the provider focuses more on offering value through low cost products.
|TIP: Card providers big and small offset the cost of offering rewards by charging higher annual fees and interest on their rewards cards. Before you choose a rewards card from any provider, think carefully about whether it will actually reward your spending, or if you could get more from your card simply by choosing a lower cost option.|
Pay particular attention to reward value as higher value redemptions on international travel remain off the table for now.
Credit card extras can be just as appealing as rewards – and may provide value under the right circumstances. Extras may include yearly travel credit, airport lounge passes, upgrades on flights and complimentary insurance cover.
What should you look for? Some credit cards go big on extras. While choosing a card packed with extras can be tempting, it’s worth bearing in mind that it will likely come with a much higher annual fee. When weighing up your options, consider whether you can afford the annual fee, then calculate the value of the extras to you.
What can the little guy offer? Again, big brands offer a bigger selection to choose from, often providing platinum and black cards within a variety of different card options. Smaller brands may offer higher tier cards with added extras, but bear in mind these will still come at a higher cost than more basic cards.
|TIP: Many credit card extras focus on travel, providing little luxuries such as upgrades at hotels and limo transfers to the airport. With travel limited by the pandemic, it’s worth paying special attention to how much you will use the extras offered on each card – to then consider whether you might be better holding off on choosing a card with travel perks for now.|
Beyond the Basics
Right, so that’s the basics covered. But, what if you want more from your card? And, what if you expect more from your card provider? Looking beyond the big banks, you may find you benefit from more than just access to credit, more than just rewards, more than just extras. So, what can you expect when you make a choice ‘outside the box’?
Before we get into the benefits of choosing a credit card from a customer-owned provider, let’s look at what customer-owned banking is exactly.
As the name suggests, customer-owned institutions are owned by their customers. As such, their customers are their shareholders. According to the Customer Owned Banking Association (COBA), it has 66 of Australia’s customer-owned institutions as members, made up of credit unions, mutual banks and building societies. This group has more than 4.5 million customers and $144 billion in assets.
Time to break down the benefits of going customer-owned with your credit card.
Want more? Here are some highlights.
While the moral compass of your card provider may not be top of mind when you choose a credit card, perhaps it should be. It’s easy to think of your card as just a piece of plastic – just as your mortgage is just a loan and your term deposit is just somewhere to park your money to help it grow. But, there is so much more to it than that.
Let’s take term deposits as an example. You place money in a term deposit, locking it away for a certain number of years. Obviously, that money doesn’t just sit in some impenetrable vault at your local branch. Instead, your money is pooled by your financial provider, who will then use it to make more money, perhaps by making investments, or by lending it out.
The question is, do you know what kind of investments your provider is making? Or to whom it is lending money – and thus financing?
Last year, research carried out by the Responsible Investment Association Australasia (RIAA) indicated 86% of Australians expect their savings and super to be invested responsibly and ethically. Two thirds said they didn’t want their money to cause harm to the planet by supporting activities related to fossil fuels, logging or environmental degradation.
However, the truth may be that your provider is not making investment and lending decisions that you would consider ethical. Your provider may be lending your money to businesses involved in activities you don’t agree with, such as fossil fuels, tobacco or arms manufacturing.
As an example, research by advocacy group Market Forces indicates Australia’s big four banks have loaned $35.5 billion to the fossil fuel industry since 2016, when the Paris Agreement was introduced.
Enter, Ethical Banking
Ethical banking is a term used to describe the efforts being made by certain financial providers to make positive impacts on our society and environment, as they make ethical decisions regarding what investments they make and who they choose to fund. In doing this, these providers seek to avoid harm, while making a commitment to ethical banking practices as an organisation.
Bank Australia is an excellent example of an organisation championing ethical banking. Let’s look at how it does this.
Aiming to do good by making ethical choices in the products it provides, the support it offers, and the investments it makes, Bank Australia says it uses its money “to help create positive impact for people, their communities and the planet”.
Examples of this includes lending to:
Now to the industries Bank Australia chooses not to lend to.
Live Animal Exports: Bank Australia doesn’t lend to organisations that use intensive animal farming systems like battery caged hens and sow stalls, or organisations that export live animals.
Gambling: Bank Australia doesn’t lend to casinos, online gambling operators or businesses that derive revenue directly from poker machines or sports betting.
Arms Industry: Bank Australia doesn’t lend to corporations that produce or sell armaments.
According to Don’t Bank On The Bomb, the following providers in Australia invested in nuclear weapons during the period January 2018 – January 2020.
Fossil Fuels: Bank Australia doesn’t lend to coal, gas or oil extraction or fossil fuel electricity generation.
Wondering whether your provider lends to fossil fuels? According to Market Forces, here’s how the numbers stack up.
|ANZ||$10,843m||loaned to fossil fuels globally since 2016|
|Bank of Queensland||$31m||“financing to companies directly involved in fossil fuel mining” (as at 31 August 2019).|
|Citi||$1,439m||loaned to fossil fuels since 2016|
|Commonwealth Bank||$12,059m||loaned to fossil fuels globally since 2016|
|HSBC||$1,375m||loaned to fossil fuels in Australia since 2016|
|ING||$722m||loaned to fossil fuels in Australia since 2016|
|Macquarie||$5,026m||loaned to fossil fuels globally since 2016. Macquarie (via Macquarie Investment Management and other subsidiaries) also holds more than $2.5 billion of shares in numerous coal, oil and gas companies.|
|NAB||$7,274m||Loaned to fossil fuels globally since 2016|
|Westpac||$5,396m||loaned to fossil fuels globally since 2016|
Meanwhile, here are the providers with no record of funding fossil fuels, with their position statement provided.
|Adelaide Bank||In respect of our own carbon footprint we make conscious decisions to reduce and offset our impact and we help others do the same by offering green products and services. As we do not currently lend to projects in the coal and coal seam gas sectors, we are simply taking a pragmatic approach that says it makes no sense to broaden our footprint by starting to do so.|
|Australian Military Bank||Australian Military Bank primarily provides retail banking services to its members and does not undertake commercial lending.|
|Australian Mutual Bank||Australian Mutual Bank does not have any direct investments in the fossil fuel industry. Nor are there direct investments in gambling, armaments, persistent chemicals, or animal testing. Australian Mutual Bank’s banking services are directed to improving the economic and social well-being of members as opposed to corporate speculative gain.|
|Auswide Bank||Auswide Bank does not finance companies engaged principally in the exploration, mining, manufacture or export of thermal coal or coal seam gas. Nor do we intentionally invest directly in companies specialising in these areas. We are always committed to the protection of our environment in both our banking and operating practices and endeavour at all times to be a responsible corporate citizen.|
|AWA Alliance Bank||AWA’s mission is to significantly contribute to an improved and sustainable future for our members and their communities, as such, our lending and investment portfolio precludes any involvement in the fossil fuel industry.|
|bcu||bcu does not invest in fossil fuel projects, however with some of our customers in regional areas of NSW affected by challenging employment conditions, many tradespeople are now working in FIFO (Fly in, fly out) roles and some would be working in fossil fuel operations undoubtedly they remain customers of bcu but this would be our only association.|
|Bank Australia||Bank Australia has not made and will not make any loans to the fossil fuel industry, including coal and coal seam gas. Bank Australia is also conscious of the impact of its own operations and has been carbon neutral since 2011.|
|Bank First||Bank First does not directly invest in listed or unlisted shares. It also does not invest in fossil fuels and has no plans to do so.|
|Bank of us (formerly B&E)||As a customer owned bank, Bank of us operates by the values that are important to our community. We can confirm that we have no loans or investments in coal or mining industries.|
|BankVic||BankVic lends only to members for personal purposes. We do not lend to businesses nor invest in the fossil fuel industry.|
|BDCU Alliance Bank||We make conscious decisions to reduce and offset our impact and we help others do the same by offering green products and services and reviewing how we go about our business. We do not currently lend to projects in the coal and coal seam gas sectors and given our commitment to reducing our environmental footprint, it makes sense to continue this approach throughout our business including the investments we make.|
|Bendigo Bank||In respect of our own carbon footprint we make conscious decisions to reduce and offset our impact and we help others do the same by offering green products and services. As we do not currently lend to projects in the coal and coal seam gas sectors, we are simply taking a pragmatic approach that says it makes no sense to broaden our footprint by starting to do so.|
|Beyond Bank||Beyond Bank Australia does not have any investments with fossil-fuel associated companies. We’re a community focused bank and we work closely with community groups to create good together through health, education and the environment.|
|Community First Credit Union||Community First has no investments in the fossil fuel industry. Our size relative to other financial institutions in Australia means that we rarely if ever hold any outside investments in wholesale markets.|
|Credit Union SA||Credit Union SA’s principle activities are the provision of retail financial services including accepting member deposits and advancing loans to members. The Credit Union primarily invests funds received from members deposits in retail loans to members. The remaining funds are primarily held in cash and liquid investments with other financial institutions to meet minimum liquidity compliance requirements under the Australian Prudential Regulatory Authority (APRA). No funds are directly invested by the Credit Union in the fossil fuel industry.|
|CUA (Credit Union Australia)||CUA does not directly finance the coal and gas sector and we do not lend directly to companies within those sectors. As Australia’s largest credit union, CUA’s business is the provision of personal banking products and services and our business banking customers are typically within the SME sector.|
|Defence Bank||We can confirm that Defence Bank do not and will not provide loans to fund new coal or gas mining, transport or export projects that enter the boundary of the Great Barrier Reef World Heritage Area.|
|Delphi Bank||In respect of our own carbon footprint we make conscious decisions to reduce and offset our impact and we help others do the same by offering green products and services. As we do not currently lend to projects in the coal and coal seam gas sectors, we are simply taking a pragmatic approach that says it makes no sense to broaden our footprint by starting to do so.|
|Endeavour Mutual Bank||Endeavour Mutual Bank does not have any direct investments in the fossil fuel industry. Nor are there direct investments in gambling, armaments, persistent chemicals, or animal testing. Australian Mutual Bank’s banking services are directed to improving the economic and social well-being of members as opposed to corporate speculative gain.|
|Firefighters Mutual Bank||The Bank does not use members’ deposits to directly lend to, buy equity or debt in, any large-scale greenhouse polluting activities from fossil fuel exploration, extraction, production and use. The Bank does not use members’ funds to finance large-scale greenhouse-gas pollution.|
|First Choice Credit Union||First Choice Credit Union does not invest in the fossil fuel industry.|
|G&C Mutual Bank||1) We have no direct investments in any large scale polluting activity or company. |
2) We do not use members fund to finance large greenhouse gas production.
3) We do not use members deposits to directly lend to, buy equity or debt in, any large-scale greenhouse polluting activities from fossil fuel exploration, extraction, production and use.
|Gateway Bank||Gateway Bank does not have any direct investment in fossil fuel industries, nor does it intend on investing in any fossil fuels industries in the future.|
|Greater Bank||The Greater does not invest or lend to companies directly involved in the fossil fuel industry.|
|Goulburn Murray Credit Union||GMCU does not lend to or invest in the fossil fuel (coal, gas and oil) industry.|
|Health Professionals Bank||The Bank does not use members’ deposits to directly lend to, buy equity or debt in, any large-scale greenhouse polluting activities from fossil fuel exploration, extraction, production and use. The Bank does not use members’ funds to finance large-scale greenhouse-gas pollution.|
|Heritage Bank||Heritage Bank does not invest with companies involved in coal and gas production.|
|Horizon Bank||Horizon Bank is a responsible and influential environmental citizen, as such, Horizon Bank does not directly invest in, or provide loans to, any company in the fossil fuel industry.|
|Hume Bank||As a customer owned organisation, Hume Bank operates by the values that are important to our community. We seek to be a sustainable organisation in every way. We can confirm that we have no loans to coal or mining industries nor any investments in these sectors.|
|Hunter United||Hunter United is a customer-owned mutual providing retail banking services to its members and does not undertake commercial lending.|
|IMB||IMB’s investment policy precludes investment by IMB in shares and therefore IMB does not hold and shares in companies such as those you describe [in the fossil fuel industry]. IMB does not have any equity investments in the fossil fuel sector. IMB Treasury does not have any direct investments in the fossil fuel sector.|
|Judo Bank||We do not invest nor lend to the fossil fuel industry.|
|Laboratories Credit Union (LCU)||We’re helping to create a better planet by refusing to lend money to the fossil fuel industry. We also offer a range of green products to help encourage our members to purchase goods, like cars and home improvements (e.g. solar and water saving devices), that are kinder to our environment.|
|Maleny Credit Union (MCU)||MCU will endeavour to avoid financial or any other support to individuals or businesses whose activities are detrimental or destructive of the environment, harmful to members of society or inhumane.|
|ME Bank||ME does not have any investments in the mining industry, including the coal and gas export industries, and does not intend to invest in these industries in future. Given ME is owned by 26 industry super funds, we are committed to responsible business practices. ME is particularly committed to ensuring human and labour rights are upheld with all the parties we do business with.|
|MOVE Bank||With regard to investments in the fossil fuel industry (coal, gas and oil), MOVE Bank states: We can confirm that MOVE Bank does not actively invest in these industries. We do hold investments with other financial institutions, but cannot confirm what their relationship with these industries may be.|
|MyState Bank||As a company that is committed to a sustainable community, MyState does not directly invest in any coal, gas or oil projects. Our investment policy states that we invest our money with other approved deposit taking institutions (ADIs).|
|Newcastle Permanent||Newcastle Permanent is a customer-owned (or mutual) retail banking institution that deploys its funds primarily for home loans, personal lending, and small businesses. Although Newcastle Permanent is the largest building society in Australia, being a relatively smaller financial institution compared to the major and regional banks, Newcastle Permanent is not involved in financing large mining projects.|
|P&N Bank||As a retail bank and not a business bank, P&N Bank lends for property/land/personal loans and credit cards. P&N Bank does not invest in any companies associated with the coal and gas sector.|
|People’s Choice Credit Union||No, we don’t have any equity investments in the fossil fuel sector, nor do we lend directly to companies in those sectors. This is because as a credit union our business banking clients are SMEs [small and medium enterprises] rather than large corporate entities.|
|Police Bank||Police Bank provides personal banking services to our members and does not directly invest in projects involved in the coal, gas and oil sectors.|
|Police Credit Union||As part of our pledge to operate in an environmentally sustainable manner in 2008, we committed to reducing our carbon emissions by at least 5% a year. In 2018, we well exceeded our goal, achieving a 100% carbon neutral position, two years ahead of target. Police Credit Union does not fund fossil fuels.|
|QBANK (Formerly Queensland Police Credit Union)||QBANK does not directly lend to or directly invest in projects or businesses involved in the coal, gas and oil sectors.|
|Qudos Bank||The Board will only allow our customers’ money to be placed in deposits with: 1) the Commonwealth Government or the government of an Australian State or Territory; 2) a financial institution guaranteed by the Commonwealth Government or the government of an Australian State or Territory; and 3) Authorised Deposit Taking Institutions (ie banks) trading in Australia who are rated at least investment grade. By restricting our investments to deposits with the government or other banks and credit unions we are not investing in unethical investments and do not support the coal/fossil fuel industries or environmentally detrimental projects.|
|Queensland Country Bank||Queensland Country does not invest directly in the fossil fuel industry.|
|Rabobank||Rabobank finances the sustainable development of the food & fibre industry and as a global Food & Agriculture bank, the fossil fuel industry is not relevant for us. As such, Rabobank Australia & New Zealand does not finance the primary production of fossil fuels and has communicated in a number of cases our concerns about exploring unconventional fuels such as CSG, Shale Gas and Tar Sands.|
|Regional Australia Bank||We do not invest in or lend to the coal or gas industries, and prefer to invest in clean technologies and refine our banking product to reward socially responsible and environmentally friendly initiatives.|
|Southern Cross Credit Union||Southern Cross Credit Union does not support investment in the fossil fuel industry. We believe reducing our carbon footprint is vitally important and as such we actively support sustainability initiatives within our business and the greater community.|
|South West Slopes Credit Union||SWSCU does NOT invest in coal, oil or gas companies that are involved with unsustainable environmental nor climate impacting organisations.|
|Summerland Credit Union||Summerland does not have any loans to organisations involved in the fossil fuel exploration/export business. Summerland’s primary lending focus is concentrated around residential mortgages, small/medium business and community organisations as well as personal loans.|
|Sydney Mutual Bank||Sydney Mutual Bank does not have any direct investments in the fossil fuel industry. Nor are there direct investments in gambling, armaments, persistent chemicals, or animal testing. Sydney Mutual Bank’s banking services are directed to improving the economic and social well-being of members as opposed to corporate speculative gain.|
|Teachers Mutual Bank||The Bank does not use members’ deposits to directly lend to, buy equity or debt in, any large-scale greenhouse polluting activities from fossil fuel exploration, extraction, production and use. The Bank does not use members’ funds to finance large-scale greenhouse-gas pollution.|
|The Mutual Bank (Maitland Mutual)||As a regional building society, we are not involved in financing large mining projects but do lend money to some small and medium sized businesses who could have either direct or indirect exposure to the mining sector.|
|Traditional Credit Union||Nil business lending offered.|
|Transport Mutual Credit Union||Transport Mutual Credit Union does not invest in the fossil fuel industry.|
|UniBank (formerly unicredit)|
|Up Bank||Deposits provided through the Up apps are held by Bendigo and Adelaide Bank … Bendigo Bank does not currently lend to and has no plans to lend to projects in the coal and coal seam gas sectors.|
|WAW Credit Union||WAW does not invest in gas or coal.|
The following are providers with no record of funding fossil fuels, but have no position statement in place.
Interestingly, Suncorp is the only provider on the Market Forces list that has funded fossil fuels in the past, but now no longer does. Having provided loans to fossil fuels in 2008-2009, the bank chose to withdraw from the sector.
While Bank Australia is a brand renowned for its stance on ethical banking, there are plenty of other providers fighting the good fight. One example of which is Teachers Mutual Bank.
Teachers Mutual Bank has been recognised as one of the world’s most ethical companies by the Ethisphere Institute for the past eight years. This year, it was one of only five banks across the world to earn a place on the list. It’s also the only Australian bank to receive Certification from RIAA for all retail products deposits, mortgages and wholesale funding.
As an ethical bank, Teachers Mutual Bank chooses not to provide funding where ‘the primary purpose of the entity or business is alcohol, armaments, correctional facilities, cryptocurrency, deforestation or gross environmental degradation, gambling, military activities, political activities, pornography, slavery, tobacco or uranium’. The bank also does not make political donations.
In terms of climate action, the bank says it invests in social and environmental programs that help to create positive change now for a better tomorrow. It is 100% powered by renewables, and is and a leader in zero investment in the fossil fuel industry.
Community is also important to the bank. With its focus on education, the bank puts profits back into the education community. On its site, the bank states: “While big banks give less than 0.7% of their profits after tax to the community, we return 6.8% to the Bank’s members and the education community.” This creates opportunities through scholarships, grants, donations and professional development programs.
Note, membership to Teachers Mutual Bank is only open to citizens or permanent residents of Australia who are current or retired employees in the Australian education sector, as well as family members of customers of the bank.
Other notable providers include CIRCLE Alliance Bank for its stance on social responsibility, Defence Bank for its Foundation’s work to help injured, wounded and disadvantaged Australian Defence Force (ADF) members and their families, and Community First for its partnering with the McGrath Foundation on the Community First Credit Union McGrath Pink Visa.
Making the Switch
Want to make the switch but don’t know where to start? Start by asking yourself what’s important to you? If going green is important to you, look for card providers that are making strides towards sustainability. If you want to do more for those around you, look for card providers focused on your local community.
Whether you are passionate about animal welfare, human rights, or climate change, simply do your research and find out which card providers back your cause. Further info can be found on the sites of the previously mentioned Market Forces and Don’t Bank On The Bomb, as well as Responsible Returns.
Founder of Creditcard.com.au. Roland has extensive knowledge about credit cards in Australia. Known as a credit card expert, he has been featured on tv and in various publications. Some popular offers on our site right now include the ANZ Low Rate. This special offer has no annual fee first year, a low purchase rate and long 0% balance transfer. Have a look also at the huge 0% for 30 months balance transfer from Citi with no balance transfer fees.
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