There’s an innovative new credit card about to hit the market! It’s not a particularly good card, but I’m glad folks are trying. The new card is called the Sustain: Green card (H/T: Low Cards), and it’s issued by Commerce Bank.
The marketing hook with this card is that instead of you getting credit card rewards, Commerce Bank will instead purchase carbon offsets. Here is the “rewards” structure:
Reduce your carbon footprint by 2 pounds for every dollar in Net Merchandise Purchases.
Plus, Sustain:Green will reduce your carbon footprint by an additional 5,000 pounds of carbon offsets when you make your first purchase within 90 days.
Plus, earn quarterly bonuses. Spend at least $1,250 in a quarter and Sustain:Green will reduce your carbon footprint by an additional 2,500 pounds, up to an additional 10,000 pounds per year.
I don’t know anything about carbon offsets, so I’m going to assume for the sake of analysis that they work as promised and that they are a legitimate credit card reward. The question then–assuming you want to fund the purchase of carbon offsets–is, can you produce more carbon offsets with this card, or by getting cashback from another card and using that money to buy carbon offsets?
Daily Finance actually considered this question–and here’s the conclusion:
Sustain:Green’s MasterCard offers two pounds offset per dollar spent, plus a 5,000-pound bonus after the first purchase. In year one, if a customer made $5,000 worth of purchases, she would earn 15,000 pounds of carbon offsets.
Those 15,000 pounds equates to approximately 6.8 metric tons. According to Sustain:Green’s Carbon Store, cardholders can purchase one metric ton (approximately 2,200 pounds) for $10 or 10 tons worth of carbon offset credits for $100.
A customer is essentially purchasing $68 worth of carbon offsets with $5,000 of spending, which equates to a 1.37 percent cash back value. However, carbon offsets need to be purchased in increments of $10, which means $5,000 would only buy six metric tons, a cash back rate of 1.2 percent.
In year two, without the bonus, $5,000 worth of purchases only equals 10,000 pounds (approximately 4.5 metric tons) of carbon offsets. This would decrease the cash back value to less than 1 percent – $40 credit for $5,000 because offsets must be purchased in $10 increments. The cash back value reduces from 1.2 percent to 0.8 percent.
…But if I’m reading things correctly, I think this analysis does not properly take into account the bonus described in the third bullet point, where you get another 2,500 pounds for each $1,250 spent. So I think $5,000 worth of purchases actually gets you 20,000 pounds, but only if you spend $1,250 each quarter.
That would allow you to buy nine metric tons of offsets, a $90 value. $90 rewards on $5,000 in spending equates to 1.8% rewards in a best-case scenario, which is not bad, but still not as good as a 2% rewards card. And I would think that if you purchase your offsets via a federally recognized non-profit, you could also get a tax deduction, so you’d have to take that into account.
Bottom line: you can do better than this card, though I certainly can’t fault Commerce Bank for trying something new. In fact, it’s probably a decent marketing pitch for a certain segment of the population.
The post The new Sustain: Green credit card is for environmentally conscious types who don’t understand credit cards appeared first on Personal Finance Digest.
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The marketing hook with this card is that instead of you getting credit card rewards, Commerce Bank will instead purchase carbon offsets. Here is the “rewards” structure:
Reduce your carbon footprint by 2 pounds for every dollar in Net Merchandise Purchases.
Plus, Sustain:Green will reduce your carbon footprint by an additional 5,000 pounds of carbon offsets when you make your first purchase within 90 days.
Plus, earn quarterly bonuses. Spend at least $1,250 in a quarter and Sustain:Green will reduce your carbon footprint by an additional 2,500 pounds, up to an additional 10,000 pounds per year.
I don’t know anything about carbon offsets, so I’m going to assume for the sake of analysis that they work as promised and that they are a legitimate credit card reward. The question then–assuming you want to fund the purchase of carbon offsets–is, can you produce more carbon offsets with this card, or by getting cashback from another card and using that money to buy carbon offsets?
Daily Finance actually considered this question–and here’s the conclusion:
Sustain:Green’s MasterCard offers two pounds offset per dollar spent, plus a 5,000-pound bonus after the first purchase. In year one, if a customer made $5,000 worth of purchases, she would earn 15,000 pounds of carbon offsets.
Those 15,000 pounds equates to approximately 6.8 metric tons. According to Sustain:Green’s Carbon Store, cardholders can purchase one metric ton (approximately 2,200 pounds) for $10 or 10 tons worth of carbon offset credits for $100.
A customer is essentially purchasing $68 worth of carbon offsets with $5,000 of spending, which equates to a 1.37 percent cash back value. However, carbon offsets need to be purchased in increments of $10, which means $5,000 would only buy six metric tons, a cash back rate of 1.2 percent.
In year two, without the bonus, $5,000 worth of purchases only equals 10,000 pounds (approximately 4.5 metric tons) of carbon offsets. This would decrease the cash back value to less than 1 percent – $40 credit for $5,000 because offsets must be purchased in $10 increments. The cash back value reduces from 1.2 percent to 0.8 percent.
…But if I’m reading things correctly, I think this analysis does not properly take into account the bonus described in the third bullet point, where you get another 2,500 pounds for each $1,250 spent. So I think $5,000 worth of purchases actually gets you 20,000 pounds, but only if you spend $1,250 each quarter.
That would allow you to buy nine metric tons of offsets, a $90 value. $90 rewards on $5,000 in spending equates to 1.8% rewards in a best-case scenario, which is not bad, but still not as good as a 2% rewards card. And I would think that if you purchase your offsets via a federally recognized non-profit, you could also get a tax deduction, so you’d have to take that into account.
Bottom line: you can do better than this card, though I certainly can’t fault Commerce Bank for trying something new. In fact, it’s probably a decent marketing pitch for a certain segment of the population.
The post The new Sustain: Green credit card is for environmentally conscious types who don’t understand credit cards appeared first on Personal Finance Digest.
Continue reading...