The 5 Most Ethical Credit Card Companies

Credit cards have been a hit with the American public since the late 1950s. Convenient to carry and easy to use, credit cards allow people to go on spending sprees, settle medical bills, and pay for their vacations. 

They’re issued by credit card companies, which are banks and credit unions that can set credit limits for their customers. For decades, many credit card companies charged unfair interest rates and fees but the great financial crisis exposed these practices, leading to greater financial regulation. 

These changes led to the growth of ethical credit card companies. In our opinion, as of the writing of this article, five of the most ethical credit card companies in America (besides Aspiration!) include TCM Bank, Amalgamated Bank, Mechanics and Farmers Bank, U.S. Bank, and Beneficial State Bank. 

In this article, we examine the factors that make a credit card company ethical and list the five most ethical and socially responsible credit card companies. 

Key takeaways

  • Ethical credit card companies usually refrain from soliciting applications from customers who are vulnerable to overspending or accumulating high amounts of debt, such as people with known poor credit histories.
  • Some ethical credit companies have B Corp certification (designation that a business is meeting high standards of verified performance, accountability, and transparency) or are members of the Global Alliance on Banking for Values. These banks and credit unions do not invest any money in fossil fuels, logging, or weapons manufacturing businesses.

What is a credit card company? 

A credit card company is a bank or credit union that issues credit cards to customers. When customers pay with a credit card, they are essentially borrowing money from the credit card company. Credit card issuers oversee every stage of the loan process, from approving credit applications to setting credit limits to offering rewards. 

Every credit card company makes revenue by setting its own credit conditions. They assign interest rates based on applicants’ credit history and place fees on different services and products. Almost all companies charge customers late fees for late monthly payments, and a few charge customers additional annual fees for the maintenance of their accounts. 

There are also cash advance fees that customers are charged if they want to withdraw cash from an ATM using their credit cards, which is usually around 2-5% of the amount being withdrawn. Businesses that accept credit card payments are also required to pay “interchange” fees for payment processing.

Because credit card companies take the responsibility of setting credit limits for customers, they have to regularly report customers’ payment history and credit information to the relevant financial bureaus. If a customer files for bankruptcy, the credit card issuer has to process any debts and build repayment plans with them.

What makes a credit card company ethical?

For decades, credit card companies maximized profits by raising interest rates and charging customers hidden fees with little to no notice. But when the Great Recession happened at the tail end of the 2000s, people began scrutinizing these practices as many became concerned about the ethical conduct of banks. 

The public debate revealed that many credit card companies encourage unnecessary spending through misleading introductory interest rates. Customers were frequently contacted by credit card issuers who offered them multiple credit card application opportunities with attractive credit limits, irresistible rewards, and guarantees of low fees. 

But many customers who accepted these credit cards quickly realized that the credit conditions changed as soon as they started using their credit. Mysterious fees appeared on balance statements with no prior warning and interest rates were increased to around 20% despite customers making payments on time. 

Thankfully, public pressure to change these practices worked, and the government introduced legislation, such as the Credit Card Accountability, Responsibility, and Disclosure Act of 2009, that limit the predatory practices of credit card companies.

Today, a credit card company is considered ethical when it provides customers with transparent and fair terms and conditions. An ethical credit card company will usually refrain from aggressively soliciting customers who are vulnerable to overspending or accumulating high debt, such as university students and people with known poor credit histories. 

More than that, they commit to ethical lending practices, only making investments in socially responsible businesses that do not harm the environment or human lives. To show their commitment to ethical practices, some credit card companies may take on B Corp and/or Global Alliance for Banking on Values (GABV) certifications.

Why is it important for credit card companies to be ethical?

It’s important for credit card companies to be ethical so that millions of ordinary people do not accumulate dangerously high amounts of credit card debt. If credit card issuers provide transparent terms and conditions on borrowing and prioritize customer relationships over profits, credit cards can become helpful financial products for many people. 

Ethical credit cards aim to reduce the risk that customers will overspend. They don’t target people who already have large amounts of credit card debt as these people are likely to get behind on payments and accrue late fees. They may also avoid setting misleading minimum monthly payments that encourage customers to use their credit cards for all expenses, including groceries and petrol. 



The 5 Most Ethical Credit Card Companies

The most ethical credit card companies in America provide lower interest rates and fees than their more traditional counterparts. They’re also avid investors in social responsibility projects that improve the standard of living in local communities. Here’s the list of five of the most ethical credit card companies (besides Aspiration!), in our opinion.

TCM Bank 

TCM Bank is a Florida-based community bank that’s a subsidiary of the Independent Community Bankers of America (ICBA). The bank focuses on providing credit card services to local communities through community banks. It currently has over 320,000 customers nationwide and offers credit cards linked to the Visa and Mastercard networks. 

One of TCM Bank’s most popular credit cards is its Green America Visa® credit card. This affinity credit card was developed in conjunction with Green America, a nonprofit organization that promotes environmental awareness and ethical consumerism. With this card, customers can donate a portion of every purchase made to Green America’s clean air, green business, and conservation projects.

The Green America Visa credit card offers a 0% introductory APR for the first 12 months (9.99-17.99% thereafter) and does not charge an annual fee. Customers also receive one reward point for every dollar spent with the added perk that points never expire. 

Amalgamated Bank 

Amalgamated Bank is America’s largest B Corp certified bank and a member of the GABV network. Headquartered in New York City, Amalgamated serves thousands of local communities, labor unions, charitable organizations, and individuals across the nation. It invests heavily in gender equality, immigrant rights, and affordable housing, and maintains a strict fossil-fuel-free investment policy.

The Amalgamated Bank Maximum Rewards® Mastercard® issued by First National Bank of Omaha (FNBO) provides customers with an introductory 0% APR for the first 6 months with no annual fee, followed by an APR of 18.24 to 28.24%. Like Amalgamated, FNBO makes large contributions to community housing and financial literacy projects, with $122 million in investments so far.

M&F Bank 

Mechanics and Farmers Bank (M&F Bank) is a black-owned Community Development Financial Institution (CDFI) designated community bank. For more than a century, M&F Bank has provided credit and loans to individuals, businesses, and nonprofits. It maintains operations in economically distressed communities and redeploys 83% of its deposits as loans to community members

An Equal Opportunity lender, M&F Bank offers a variety of credit cards with different rewards and fees. Their  Platinum Payback Mastercard, for example, charges no annual fee and has a 10.99 to 21.99% APR on purchases. While their World Mastercard charges $35 in annual fees but offers 12.24% APR on purchases (lower than the average APR of 16.15%) and zero foreign transaction fees.   

U.S. Bank 

Although it’s not known for being very environmentally friendly, U.S. Bank has financed over 15% of the U.S. solar industry annually through more than $10 billion in tax equity financing projects. The credit card company also commits more than $1 billion per year to clean energy and affordable housing projects. 

Despite these initiatives, critics have called on U.S. Bank to do more, such as by divesting from Enbridge Energy, the company responsible for the Alberta Clipper tar sands pipeline. Whether U.S. Bank will agree to these requests remains to be seen, but it has pledged to ramp up its commitment to environmental responsibility

In recent years, U.S. Bank has built partnerships with climate organizations like Ceres and the Clean Energy Trust. It has also issued the REI World Elite Mastercard that charges 13.99 to 23.99% APR, no annual fees, and no foreign transaction fees. 

Beneficial State Bank 

Beneficial State Bank is a B Corp certified bank and a member of the GABV that’s widely considered as one of America’s most socially responsible banks. It has committed millions of dollars to renewable energy projects, which have offset nearly 450,000 mT of carbon, and affordable housing initiatives that have built over 10,000 new units

And that’s not all, Beneficial State Bank has partnered with several leading environmental nonprofits, including Clean Water Action, Amazon Watch, and the International Living Future Institute to offer ethical affinity credit cards. These credit cards offer an introductory 0% APR for the first 6 months. After that, the APR is set between 10.24 to 20.24% with a 3% charge on balance transfers. 

Try Aspiration’s ethical credit card

Aspiration could be the solution to your ethical finance needs. As a B Corp certified online financial platform, we take a socially conscious and environmentally-friendly approach to finance. 

We believe the Aspiration Zero credit card is one of the most ethical credit card options available on the market today. We will plant a tree each time our customers make a purchase with their cards, and let you round up to plant one too, which helps reduce the amount of Co2 in Earth’s atmosphere.

We also have the Aspiration Spend and Save account, where customers receive an eco-friendly debit card and can earn up to 5.00% APY on their savings with the bonus of having free access to over 55,000 Allpoint ATMs. 

Furthermore, we pledge to not use any of our customers’ Spend & Save deposits or Zero fees to fund fossil fuel projects that destroy our planet. We prefer to create a more sustainable future by donating a percentage of our earnings to environmental conservation projects.

Apply with Aspiration today!

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