Tim K Ng asked:
According to the 2009 Australian Consumer Credit Card & Banking Survey, nearly 60% of consumers only applied to their existing bank for a credit card, and a pitiful 6% checked out a credit card comparison website. Given that the same survey revealed that consumers’ main goal was to secure the best deal, these are astonishing figures.
Part of the reason why this is so may be because customers have some misguided sense of loyalty to their bank. But remember these are the same banks that reserve their best deals for new customers, and give their loyal customers the same old rates time and time again.
Banks are incredibly well-practiced at making customers feel they should stay put. If you have ever tried to cancel a credit card with your provider, you will not have experienced the following:
“Hello, Mr Smith here, I’d like to cancel my credit card.”
“Certainly, Mr Smith, I quite understand – our rates are extremely uncompetitive. One moment… there, that’s all done. Have a nice day.”
You are more likely to have experienced something like this:
“Hello, Mr Smith here, I’d like to cancel my credit card.”
“Sorry to hear that, Mr Smith, can I ask why?”
“I’ve found a better deal.”
“I see you’ve been with our bank a long time.”
“That’s right.”
“You have your accounts and your mortgage with us.”
“That’s right.”
“So why would you want to cancel your credit card?”
“I said: I found a better deal.”
“I can reduce your interest rate from 18% to 17.99%.”
“That’s still 7.99% more than I can get elsewhere.”
“Damn it, Mr Smith, I can’t believe you; after all we’ve been through together. I know our card might not be as pretty as other cards, or have the same gorgeous figures, but you can’t throw away 10 years just because some new floozy of a credit card catches your eye. Please stay with us, I’ll send you a free pen… please. We’ll miss you so much. We talk about you all the time at the AGM. Please don’t make any rash decisions; I’m going to let the bank CEO know what’s happening. I’m going to call and have his Lear jet fuelled. He’ll be knocking on your door within the hour. Just hang on.”
“Uh… okay.”
Perhaps that’s an exaggeration, but you get the point. Credit card providers are never keen to let you go, and whoever you speak to will make you feel rotten for wanting to save money by “disloyally” switching to another credit card.
Don’t feel guilty! Remember whose finances are most important to you – yours. The bank will get along fine without you. Stand your ground and don’t succumb to the pleading tones of the customer service representative who will no doubt receive a bonus for keeping you on board.
Tamara
According to the 2009 Australian Consumer Credit Card & Banking Survey, nearly 60% of consumers only applied to their existing bank for a credit card, and a pitiful 6% checked out a credit card comparison website. Given that the same survey revealed that consumers’ main goal was to secure the best deal, these are astonishing figures.
Part of the reason why this is so may be because customers have some misguided sense of loyalty to their bank. But remember these are the same banks that reserve their best deals for new customers, and give their loyal customers the same old rates time and time again.
Banks are incredibly well-practiced at making customers feel they should stay put. If you have ever tried to cancel a credit card with your provider, you will not have experienced the following:
“Hello, Mr Smith here, I’d like to cancel my credit card.”
“Certainly, Mr Smith, I quite understand – our rates are extremely uncompetitive. One moment… there, that’s all done. Have a nice day.”
You are more likely to have experienced something like this:
“Hello, Mr Smith here, I’d like to cancel my credit card.”
“Sorry to hear that, Mr Smith, can I ask why?”
“I’ve found a better deal.”
“I see you’ve been with our bank a long time.”
“That’s right.”
“You have your accounts and your mortgage with us.”
“That’s right.”
“So why would you want to cancel your credit card?”
“I said: I found a better deal.”
“I can reduce your interest rate from 18% to 17.99%.”
“That’s still 7.99% more than I can get elsewhere.”
“Damn it, Mr Smith, I can’t believe you; after all we’ve been through together. I know our card might not be as pretty as other cards, or have the same gorgeous figures, but you can’t throw away 10 years just because some new floozy of a credit card catches your eye. Please stay with us, I’ll send you a free pen… please. We’ll miss you so much. We talk about you all the time at the AGM. Please don’t make any rash decisions; I’m going to let the bank CEO know what’s happening. I’m going to call and have his Lear jet fuelled. He’ll be knocking on your door within the hour. Just hang on.”
“Uh… okay.”
Perhaps that’s an exaggeration, but you get the point. Credit card providers are never keen to let you go, and whoever you speak to will make you feel rotten for wanting to save money by “disloyally” switching to another credit card.
Don’t feel guilty! Remember whose finances are most important to you – yours. The bank will get along fine without you. Stand your ground and don’t succumb to the pleading tones of the customer service representative who will no doubt receive a bonus for keeping you on board.
Tamara
