Is bank loyalty worth it?
When is loyalty to a particular bank or brand worth it and when is it simply folly
to stick with one particular company? This article will attempt to answer this vexed question with reference to a few examples.
Let there be no mistake: banks want you business, all of it. While in the past it might have been common to go to one place for savings, another to borrow, somewhere else for insurance and to another still for holding a general current account now the banking behemoths want all of your cash all in one place.
The reasons are twofold: first, the more that you have invested with one bank the greater the amount of capital they hold, this is very simple and second, the greater your loyalty to a bank the greater the chances that you'll pay back credit if problems arise.
Studies have shown that consumers tend to prioritise paying back their loans from the bank at which they have a current account, for example, presumably on the basis that the bank has a better idea than even they do of their finances.
So what do banks do to keep their customers? That question is immediately answered when you go to compare credit cards or, increasingly, to compare personal loans.
The best deals with the lowest rates are being offered to long-term loyal customers at the banks and, although many other competitive deals still exist for outsiders, in this historical moment, when the banks have become more cautious than usual,
This is clear as well when one goes to compare savings accounts which for many banks form the backbone of a loyal customer base.
In this case there are a slew of introductory offers which are available to any applicant with the right credentials and, since most only last a year, moving to a different account in a different place is practically encouraged and certainly encouraged by other banks.
Of course, there is another factor in all of this: customer service.
Bank customer service changes over the years, branches open and close or more services become available or, in the case of some banks recently, companies merge into one another and cause their customers to go insane with losing their accounts or having to switch deals.
So, is bank loyalty worth it?
The answer is yes but only when it comes to certain products. Loyalty should be used as ace for consumers, something to point out when you want the bank to give you the best deal, rather than as a general ethical code for consumers and bank customers.
Is bank loyalty worth it?
By: Julia Cook
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