Incentives to Switch Bank

binaryuniverse

RG2015 wrote: »

Not if you are never going to use it.

Some people never use the phone insurance they are paying for. Does this mean those aren't product or services?

Whether it is used or not is irrelevant. A bank account IS a product and a service.
Also, if you have an account open you ARE using it. Whether actively or not is, again, irrelevant.

RG2015

Thanks Zanderman. This is the most considered and persuasive answer so far!

I am in the fortunate position of not needing to chase bank switching fees. I do however chase the best interest rates. I cannot change the way I am but I am fascinated to find out what others think.

I am happy to brag about having several high interest accounts but would never consider opening an account purely for the fee let alone bragging about how many £hundreds I had been given.

It is just my personal feeling and as I noted before I now see that I am in a minority. Perhaps even a minority of one.

binaryuniverse

I'm interested to know what is the difference, in your eyes, between a bank giving £125 to switch, but no interest, and £125 in interest over a year?
In today's climate both are loss leaders designed to attract your custom. Of course, with the latter, the bank gets to use your money, but it's not as if they are going to miss your £2500 (if it was a max balance of £2500 at about 5%. Hi NW!) out of all the other accounts they have.

RG2015

binaryuniverse wrote: »

I'm interested to know what is the difference, in your eyes, between a bank giving £125 to switch, but no interest, and £125 in interest over a year?
In today's climate both are loss leaders designed to attract your custom. Of course, with the latter, the bank gets to use your money, but it's not as if they are going to miss your £2500 (if it was a max balance of £2500 at about 5%. Hi NW!) out of all the other accounts they have.

My £2,500 at 5% is earning £125 in the first year even if Nationwide are paying over the odds.

However I personally could not accept £125 from First Direct just for switching an account to them.

binaryuniverse

The HSBC group has, in the past, screwed me over for large amounts for the smallest of things; say being one day late with a credit card payment, or going overdrawn by a few pennies. Neither of them will have ultimately cost them anything. Yet they made probably £20 a pop from me each time, for doing nothing. They didn't earn that.

I have no problem with making money back from the banks. They are the first to take from you at the first opportunity.

RG2015

binaryuniverse wrote: »

The HSBC group has, in the past, screwed me over for large amounts for the smallest of things; say being one day late with a credit card payment, or going overdrawn by a few pennies. Neither of them will have ultimately cost them anything. Yet they made probably £20 a pop from me each time, for doing nothing. They didn't earn that.

I have no problem with making money back from the banks. They are the first to take from you at the first opportunity.

I've never had any problems with any bank since opening my first account 44 years ago. I once missed a credit card payment and they refunded me everything when I phoned to apologise.

Making money back from the banks is an interesting concept. Whilst I have not lost personally, we as a nation have been royally screwed. If we as a nation need recompense then the odd £125 a few times for a few people is nowhere near enough.

Jeems

If you have no problem downloading an app and using it for free but not making any "in app" purchases, then you should have no problem taking advantage of switch incentives.

Switching incentives are not a new thing and for banks to continually offer them and increase rewards too, tells me they make a lot more back in the long run, compared to what they spend on what is basically a direct marketing campaign.

RG2015

Jeems wrote: »

If you have no problem downloading an app and using it for free but not making any "in app" purchases, then you should have no problem taking advantage of switch incentives.
Switching incentives are not a new thing and for banks to continually offer them and increase rewards too, tells me they make a lot more back in the long run, compared to what they spend on what is basically a direct marketing campaign.

Thank you for your reply but I really have no wish to claim a payment from anyone for doing nothing. The purpose of the thread is to see views of others and I think that I am getting a quite decisive answer.
No one pays me any money for downloading an app and they usually bombard me with advertising so I am not really using it for free.

Zanderman

RG2015 wrote: »

My £2,500 at 5% is earning £125 in the first year even if Nationwide are paying over the odds.

However I personally could not accept £125 from First Direct just for switching an account to them.

I'm still not quite seeing your point. Your £2500 in NWide's FlexDirect Account is 'earning' 5% yes, sort of. But NWide are making a loss of 4.5% on this (4.75% until a couple of weeks ago). In other words they're giving you, as a gift, 4.5% of £2500, which is £112.5.(If this wasn't a gift/bribe the 5% would carry on beyond the first year...)

To get this they require you to commit to paying in £1000 per month - you may, if you're using the account as a primary account, be doing this anyway, but you may also (do tell!) be just doing this 'improperly' by just paying it in and taking it our again each month.

First Direct's offer of £125 to switch an account to them is them giving you, as a gift, £125. It's their bribe to try and get you to stay with them. Simple and clear. Unlike NWide's convoluted bribe.
.
What is the moral difference between FirstDirect's simple gift/bribe and NWide's complicated gift/bribe, which is dressed up as interest but is actually (and obviously) NWide making a loss and offering you a gift/bribe to stay with them?

Edited to add: NWide are, of course, cannier than FirstDirect in that their gift/bribe isn't paid out until you've been with them a year. And paid 12k in. But that semblance of normality is misleading, it's still just a bank/building society trying to hook you in with incentives. NWide just make it seem more 'real' by making it look 'normal'.

RG2015

Thanks again Zanderman but I cannot change the way I feel. It is a bit like the tax avoidance debate. Different people draw the line in different places.

For me a bribe involves payment of money. Hence a switching fee is a bribe and a generous interest rate is not. But this is just my point of view. I am neither being judgmental nor attempting to persuade others.

This has been a good discussion and I have learned a lot but however erudite your argument I cannot change my opinion. :beer: