Credit Cards 101: Responsible Credit Cards for Young Green Americans

www.freefoto.comAccording to a recent poll, 34% of Americans aged 18 to 50 do not have a credit card. For most young people, the word “finance” conjures up little more than images of suits on Wall St and a dangerously low checking account balance. Fears of crippling debt (often the result of massive student loans), predatory mega-banks, and identity theft deter us from applying for a credit card. Paying for all of your expenses with cash is a responsible option, and it is entirely possible to live a life without credit. There are, however, many advantages to educating yourself about credit cards and using them wisely. They’re small, convenient, and easy to monitor, and they allow us to accomplish a range of activities that we couldn’t with just cash or a debit card. Here are a few examples:

–          Housing – Before you sign a lease on a house or apartment, your landlord will want to check your credit as a gauge of how good you are at paying your bills. If you have bad credit or no credit, a landlord will be very wary of renting their property to you. Utilities companies also use credit as a gauge of financial responsibility. Even if you can convince a landlord to rent you their property, convincing the electric utility to turn on your power without good credit could be a real challenge.

–          Employment – Employers may check candidates’ credit to judge financial responsibility. Your credit is a reflection of your expenses, and many employers want to make sure that you are not in serious financial difficulty that could compromise your work.

–          Travel – You will need a credit card to rent a car, and book a hotel if you plan on doing any traveling. This is to cover the costs of any incidental damage to the vehicle or room.

–          Loans – Having a good credit history is crucial for securing longer-term loans for a variety of purposes. This could include a mortgage, financing a car, or even taking out a loan to start your own business. Lenders will be more willing to do business with you if they can see that you pay your bills on time.

–          Get Free Stuff- Who doesn’t love gifts? As an incentive to use their credit card, many financial institutions offer rewards to their customers. Based on the amount you spend, you can receive cash back or points that you can redeem for merchandise, travel expenses, and a wide range of offerings.

If you think you may be interested in any of the things above, then it might be time to seriously consider building a good credit history. Your credit score is a number that is calculated based on your expenses, and is meant to reflect how quickly and thoroughly you pay your bills. Your credit score is shared with anyone who might be in a position to lend you money, and by paying your balance in the full amount, on time, you can make the most of your borrowing abilities. To be a responsible credit user, you must internalize one golden rule: don’t spend more money than you have. This will help you keep track of your spending and avoid debt that can add up rapidly. It requires organization and self-control to responsibly use credit, but you can increase your long-term purchasing power to a large extent.   Responsible spending is also good for the planet; purchasing only what you need lowers your impact on the environment.

At Green America, we encourage responsible consumers to obtain “green” credit cards, offered by community investment banks and credit unions. These cards are unique in that they donate a portion of their transaction charges to organizations that support the environment and communities in need. Most major credit cards, by contrast, direct their transaction charges to executive compensation or investing in environmentally harmful activities, like coal-mining. If you are thinking that using credit is the right next step, we urge you to look at our list of recommended green credit cards. You can begin building a stable financial future for yourself, prevent your purchases from supporting harmful mega banks, and support the environment and communities in need.

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The next step is up to you: by learning to responsibly use credit and choosing a card that benefits the people and the planet, you can be a part of the generation that changes the credit industry for the better! If you’re curious to learn more about credit, here are some great resources.

A New Years Resolution Green Americans can Get Behind

Though the holiday season is full of friends, family, and good food, the prospect of a New Year’s resolution looms like an important deadline. Whether it’s taking steps to improve your personal health or checking an item off of your bucket list, our brains tend to resist serious changes when faced with periods of comfort, satisfaction, and routine.

There’s plenty of science behind this too – researchers have substantial evidence that we are at odds with our desire to change our behavior. According to a survey of 3,000 people conducted by UK psychologist Richard Wiseman, 88% of proposed New Year’s resolutions resulted in failure. An experiment conducted by Baba Shiv of Stanford University further illustrates the point. Students were split into two groups and told to remember either a two-digit number, or a seven-digit number. With their assigned number in mind, the students were then told to walk down the hallway where they were presented with a choice of snacks: either chocolate cake or fruit salad. Shiv found that the students trying to remember a seven-digit number were almost twice as likely to choose the chocolate cake over the fruit salad.

So while you’re wrapping up end-of-the year projects at work or finishing final exams at school, there is evidence to support that a mind with a high cognitive load often makes poor choices. Many New Year’s resolutions involve significant willpower and commitment – like starting a diet or an exercise regime. The focus needed to achieve these goals often falls by the wayside during the holidays, and your capacity for self-control becomes feeble – resulting in a high rate of New Year’s resolution failure.

While Green America certainly supports the pursuance of a better lifestyle, we’ve come up with a resolution that doesn’t require a high level of focus or a serious time commitment. And the best part is – it will help you work towards your other resolutions while supporting the environment, communities in need, and a wide range of beneficial programs. By Taking Charge of your credit card, you can remove support for destructive mega-banks, help fund education and the arts in underserved communities, support green businesses and protect the environment, all while receiving the same benefits and rewards that you love about your conventional credit card.

By resolving to swap your old mega-bank-issued credit card for a responsible, green card, you can make a huge impact in the world. This resolution is easy to keep- you can cancel your old credit card and apply for a new one from the comfort of your own home, and you start seeing the benefits almost immediately. Even if you fail to keep any of your other resolutions, switching to a responsible credit card will create positive impacts every time you shop.

You can use your responsible credit card to achieve your other goals too. Let’s examine some common New Year’s resolutions and think about how using a green credit card could make them even better.

1. Exercise/Eat Healthy – This is the first item on everyone’s list, because it’s just so convenient to grab a pre-made sandwich when you don’t have time to make a nutritious lunch, or eat a cookie instead of an apple. A busy life leaves little time for exercise as well, and once you stop exercising, it’s hard to get yourself to start again. A green credit card can be a reminder to make smart lunch choices, as a percentage of each transaction you make is committed to financing things like community development.  You can even increase the green impact of your card by purchasing foods like organic fruits and vegetables – supporting farmers as well as communities in need.  It’s especially smart considering the alternative – that same percentage would go straight towards outlandish executive salaries if you swiped using a card issued by a mega-bank. Using your green card is just like dieting; positive inputs lead to positive results.

 2. Budgeting- Staying on top of your finances is essential. As more transactions are carried out electronically, it’s increasingly easy to lose track of how much you spend and where you spend it. A green credit card can serve as a reminder that every dollar you spend affects the world in some way. You can rest easy knowing that your transaction charges go on to fund programs that support fair trade, clean energy, and environmental protection programs rather than to fill the pockets of the mega-banks. As you track your donations to these causes, you can simultaneously keep tabs on how much you’ve spent – it’s a win-win!

3. Be More Social – After a long week, the temptation to spend Friday night at home with pajamas and Netflix is almost too much to resist. Green America urges you to go out and spend time with your friends – catch a movie, go to a community theater, or enjoy a happy hour together. And when you’re done, you can wow everybody when you bust out your green credit card to pay. You can be a trend-setter this holiday season and encourage responsible spending throughout your social circles.

 4. Travel – We all have a destination to visit somewhere on our bucket list, whether it’s a few hours away or across the globe. 2014 is the year for departure – make your arrangements, mark your calendar, and explore the world ahead of you! It’s almost impossible to book hotels, rental cars, and other travel arrangements without a credit card, and it’s best to do it with a green card.  You can find great eco-friendly trips in our Green Pages online.  With a responsible credit card, you can cover all of your expenses and remain confident that your transaction charges aren’t bankrolling things like coal-mining or palm-oil industries.   You can also use the points from your responsible credit card for airline tickets and accommodations.

 5. Help others around you- This is the most common New Year’s resolution, yet it’s undoubtedly the most difficult to achieve. Luckily, a responsible credit card is designed to help others around you! So as you purchase holiday gifts for your loved ones, or even as you rush to Starbucks to fuel your way through that end-of-the-year project, you can be sure that somewhere, someone is benefiting from your responsible credit card being swiped. Better yet, you can purchase a monthly or a one-time donation to a great nonprofit organization and give it as a gift using your green credit card. The holidays are about giving, though there is always inevitably some consumption going on. With a responsible credit card, giving and consuming are no longer mutually exclusive.

Click the Card Above to Find a List of Responsible, Green Credit Cards

Hopefully, we’ve given you some ideas to get started on achieving those nagging New Year’s resolutions. With a credit card from a responsible lending institution, you can get the products and services you need this holiday season while simultaneously supporting programs that uplift communities in need and protect our environment. You’ll remove support from profit-seeking mega-banks, and you’ll stay inspired to follow through on those other, more difficult resolutions.

For more resources on responsible credit cards, visit http://www.takechargeofyourcard.org, and share our Facebook page with your friends!