Where you choose to bank is one of the biggest environmental choices you make. In fact, where you put your money has a bigger impact on your carbon footprint than pretty much everything else you do.

As part of Third Act’s Banking on our Future Campaign, we are sharing information and educational resources about how you can align your money with your values and find better banks, credit unions, and credit cards.

Note: The resources provided here are to help answer the numerous questions received by Third Act regarding how best to find and switch to banks and credit cards that don’t finance fossil fuels, as well as invest in and uplift communities and clean energy.

Third Act recognizes that these choices are very personal and people have different needs and requirements. We offer this information to help raise awareness about your choices, but Third Act is legally prohibited from giving financial or investment advice – these choices are your own. Starting with opening a new credit card account is the easiest entry point.

Q: How can I find out if my bank is financing fossil fuels?

Use BankTrack’s tool to look up ratings for various banks on fossil free financing. You can also check out the ratings of 60 banks investing in climate destruction in the Banking on Climate Chaos report from Rainforest Action Network. 

Q: How can I find a better bank, credit union, or credit card?

The different search tools available use a variety of criteria to identify banks that don’t invest in fossil fuels, do invest in local communities, or are women-owned or minority-owned. 

Many of the search tools include financial institutions that have designations or certifications, including: Certified B Corporation, Global Alliance for Banking on Values membership, Fossil Free Certified, 1% for the Planet, Green America Certified, Community Reinvestment Act ratings (CRA), Community Development Financial Institution (CDFI) Certification. 

If you want to do your own research on local banks and credit unions, look on their website and ask their management for certifications like those listed. There are many overlaps, as well as differences, amongst the financial institutions listed across these search tools. Many of the sites are also slow to update or include newer banks or banks that have made recent climate commitments and have not yet been included in the sites. (For example, Black-owned B-Corp local CityFirst Bank doesn’t appear on some of the sites, but is making good climate commitments.) 

Third Act is not endorsing any particular tool or banking institution. We offer these resources to help you learn more about the choices that align with your personal needs and values.

Search Tools:

Learn more in this recording of the Better Banks & Credit Cards webinar.

 

Q: What should I take into consideration before finding a better bank, credit union, and/or credit card?

Choosing a bank, credit union, and/or credit card is a personal decision. With varying personal financial goals, your values, and your behavior and needs, there is no “one size fits all.” 

Here are some questions to ask yourself:

  • Do you travel a lot and need access to a large ATM network?
  • What types of accounts do you need – personal checking and savings, high-yield savings, business, CDs, money market?
  • Do you need a physical branch nearby or online-only?
  • What kinds of fees are you willing (or not willing) to pay? These can include transfer fees, ATM fees, minimum balance requirements, foreign transaction fees, and so on. 

Q: Will closing a credit card account affect my credit score?

Closing a credit card can lower your credit score, so it’s important to take precautions to lessen the impact. 

NerdWallet has several useful resources to guide you responsibly. If you are considering a large new purchase that requires a loan and a credit check – like buying a home or a car – then do not close your old credit card before the purchase so the new loan approval won’t be affected. 

It’s also very important to start using your new credit card for a while before closing an old one. If you have had a credit card for many years, pay your bills on time, and have a good credit rating, then the credit history of this long-held card can stay in your credit report for up to 10 years.

Other considerations and tips include: 

  • Do your own credit report check before making changes
  • Choose a new credit card with the same credit level
  • Reduce or pay off your credit card balance
  • Redeem any cash-back or other rewards before closing your existing account.

Q: As a senior citizen, is it harder to get approved for a new credit card?

If you are older and are privileged to have already paid off your home mortgage or car loan, then you may have a “thin” credit file that does not have a mix of types of credits (loans, credit cards). You may also have less income so getting approval on a new credit card could be harder. 

There are steps you can take to improve your approval chances, including: 

  • Checking your own credit report first, applying for and using new cards before you close any old ones, 
  • Making sure you list all types of your income
  • Highlighting your long and positive credit history. 

You can build-up and enhance the credit mix in your credit rating in the near-term with a “secured credit card,” which requires an upfront deposit, and then transition to a traditional credit card later after your credit score has strengthened. 

NerdWallet has guidance for senior citizens applying for new credit cards. 

Q: What about my credit card rewards?

Many better credit cards from credit unions and other banks have perks, rewards, and features, as well, including cash-back. These kinds of perks and rewards are personal choices, based on how much and where you travel (domestic or international), how much you purchase, credit card fees, and other considerations. 

While perks and rewards have annual monetary value that you can estimate, and while switching may entail some tradeoffs, costs, or inconveniences, it’s important to weigh the benefits of perks against the serious costs and consequences of continuing with business-as-usual and the dirty banks that are financing costly and deadly climate destruction. 

For those who can economically afford to absorb some of the inconvenience or discomfort, this will reap climate benefits and help alleviate burdens experienced by climate-affected frontline communities. 

You will want to use or apply points or rewards (with the exception of frequent flyer miles) before you cancel your account.

Q: Will my frequent flyer miles accrued through my credit card remain with me? 

Yes, those miles go directly into your airline’s frequent flyer account – they don’t reside with the credit card company. So, if you switch your credit card, you will not lose the frequent flyer miles already accrued to date, though you would stop accruing them after you switch or as you use this card less frequently. 

You should check with your credit card company and your frequent flyer program. We should also note that as a result of the pandemic and economic challenges faced by the airline industry, several airlines have been changing their frequent flyer rules and the number of miles required to redeem various trips. Please check with your credit card and airline companies on the specifics.

Q: What steps are involved in moving my money and switching to a new bank or credit union?

  1. Find and open a new account. We encourage people to start by opening a new credit card as the easiest point of entry. 
  2. Try out the new accounts before transferring or changing much in your other existing accounts. 
  3. Compile a list of all of your automatic deposits and payments, and begin the process of changing and re-scheduling those payments, deposits, and transfers. You will need to remember all your accounts, login information and other details of these other accounts.  
  4. Lastly, close your existing accounts with the banking institutions that are destroying our planet. 
  5. When you close your old accounts, it’s very important to write them a letter and tell them why you are closing your account(s). 
  6. Report back on your experience with making the switch and share your story with us by completing this brief form. These stories help inspire and motivate other people to make the switch! And your report-back enables us to track the progress we’re making towards switching to cleaner, better banks. 

You can find sample letters and more process-oriented resources on these pages:

Q: How can I get more assistance with finding a better bank and credit card?

You are in luck! Third Act has partnered with THIS! Is What We Did, which offers peer facilitators and Office Hours to help people. THIS! also has a workbook and other resources. Sign-up for Office Hours here.

Q: I made the switch! How can I share my story?

Report back on your experience with making the switch and share your story with us by completing this brief form. These stories help inspire and motivate other people to make the switch! And your report-back enables us to track the progress we’re making towards switching to cleaner, better banks. 

 

Please note: Third Act is a non-profit educational, organizing, and advocacy organization. We are not investment advisors and are legally prohibited from providing investment or financial advice. The information Third Act provides is for educational purposes. Third Act does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments. Financial choices are your personal decisions.

 

Ways to get involved

All the different ways you can get involved with Third Act: