Nationwide Reducing Rate

bowlhead99

MatthewAinsworth wrote: »

A supposed mutual company exploiting loyalty...

...for the benefit of its members.

By offering savings rates that are not much higher than the rest of the market but enough that people won't leave in droves, they're able to offer good borrowing rates on loans, mortgages, credit cards etc without being financially crippled.

Sounds fine to me. I have a mortgage, current account, regular savings account and credit card with them, and find them all to be decent products. YMMV.

System

Bowlhead - I think building societies shouldn't do credit cards - you're either an unprofitable customer if you know what you're doing or exploited if you don't.
A problem with low saving rates is people keep less safety buffers and more overdraft risk

In the best interest of members, truely, they should be encouraging people away from unsecured debt, and more into investment

grey_gym_sock

i'm not sure nationwide should be encouraging members into investment. the investments they do offer (which are L&G products) are not great value. i'd say that's outside the area of things nationwide do well.

what they do well are basically the thing bowlhead mentioned - though with credit cards, that is only a useful product assuming you pay it off in full every month (unless within some 0% offer period).

credit cards may be profitable, even when paid off every month, because the CC company is charging the retailers 2% or so.

i do think there is no good reason for credit cards to exist - we'd be better off without them.

System

I say investments because that's actually trying to help people improve their situation, it is in the spirit of a mutual, and a way they can still make money, they just need to get better at it

jimjames

grey_gym_sock wrote: »

i do think there is no good reason for credit cards to exist - we'd be better off without them.

It's getting away from the OP but I can't see any reason why we'd be better off without them. For the financial sensible they are an excellent way of budgeting and having a single payment to settle each month. It also avoids the issues that seem to commonly occur when an additional payment is authorised from a debit card and seriously affects the person being able to spend any money. If that happens on my credit card I probably wouldn't notice it.

bowlhead99

MatthewAinsworth wrote: »

Bowlhead - I think building societies shouldn't do credit cards - you're either an unprofitable customer if you know what you're doing or exploited if you don't.

The ability to instantly buy pretty much anything you like pretty much anywhere in the developed world and pay it off back in the UK without needing to have positioned your cash ahead of the purchase (while incurring a cost of 1-2% a month if you don't pay it off the first month it appears on your statement) is hardly exploitation.

The building society is helping you manage your finances by giving you a revolving credit facility, and it's more efficient for them to do it like that than writing lots of separate loan agreements with you

Yes it's a departure from straight cash depositary services and secured mortgage-style home loans. But it's useful to consolidate your financial activity with one provider.

In the best interest of members, truely, they should be encouraging people away from unsecured debt, and more into investment

In the same way that unsecured loans are a departure from loans secured on a house, investments are a departure from cash on deposit. So, encouraging people to buy investment products and take on investment risk simply because interest rates are low is clearly not a solution without its own problems.

Generally, people do need investments, in order to make the most of their financial situation all the way through to the end of their life. But investment products are available all over the place so it is not clear that a building society should put them onto its own product menu.

I guess what you are thinking is that a mutual building society, as distinct from a bank, is a community organisation that should do good deeds, and your philosophy that "investments good, debts bad" means they should help pull people away from making bad choices by not offering products which allow unsecured debt, to instead focus on investments.

But that - getting people onto "the right track" - implies that what they offer within the spectrum of investments should perhaps not be investment management or pension scheme administration (which no doubt others can do better) or packaged investment solutions (which have always been poor value when offered by banks and building societies in the past), but some sort of financial education service together with truly independent financial advice.

However, it is difficult for people with a business model that depends on selling certain types of financial products to offer independent advice on how someone should run their life, and the education side of things is perhaps better offered by government, schools, non-profit charities etc.

If Nationwide branched out into education, investment and financial advisory products I would bet someone would be on this thread - or another like it - moaning that their savings rate had dropped to 1.1% from 1.2% to allow more competitive pricing on the other services that they didn't want. Because that's what people are already doing.

grey_gym_sock

jimjames wrote: »

It's getting away from the OP but I can't see any reason why we'd be better off without them.

my 2 main reasons why credit cards shouldn't exist are:

1) they encourage some people into borrowing money they don't have for unnecessary (or earlier than necessary) consumption. clearly, this doesn't apply to everybody who uses credit cards. and it also applies to some other forms of consumer debt.

2) the credit card company's fee to the retailer (of 2% or more) is a toll charged by the finance sector on the productive sectors of the economy. i have no problem with a fee for processing transactions, but debit card transactions can be processed for a fee of a few pence. the higher fees for credit card transactions are an unnecessary toll (one of many such tolls which the finance sector has imposed). and most retailers don't charge a supplement for paying with a credit card, which in effect means that the CC toll is paid by all their customers, not just those using credit cards, which is an additional unfairness.

xylophone

loans, mortgages, credit cards

I don't want any of those but I would like a decent rate on the so called "Loyalty Saver...." or failing that a decent rate ( like Lloyds/TSB/Tesco) on a current account without the one year in/one year out farce.

For me the only product worth having is the Flex regular saver - I do have one of those.

miller

Nationwide_web_site wrote:

We’ve reviewed the interest rates across all of our off-sale accounts to ensure that they are competitive, sustainable for the future and give a fair distribution of value to all our members.

I take it none of the directors are members then.

Seconded about the Flex Regular Saver.

Shanker

grey_gym_sock wrote: »

my 2 main reasons why credit cards shouldn't exist are:

1) they encourage some people into borrowing money they don't have for unnecessary (or earlier than necessary) consumption. clearly, this doesn't apply to everybody who uses credit cards. and it also applies to some other forms of consumer debt.

2) the credit card company's fee to the retailer (of 2% or more) is a toll charged by the finance sector on the productive sectors of the economy. i have no problem with a fee for processing transactions, but debit card transactions can be processed for a fee of a few pence. the higher fees for credit card transactions are an unnecessary toll (one of many such tolls which the finance sector has imposed). and most retailers don't charge a supplement for paying with a credit card, which in effect means that the CC toll is paid by all their customers, not just those using credit cards, which is an additional unfairness.

Trouble is, with most web sellers a credit card is the only way to pay, plus you get the extra protection with a credit card that you don't get with a debit card, cheque or cash.


They have become a necessary evil.


Yes it is off subject - we need to get back.