Rate Tarts

[peterbirks]

I see that the initiator of the "free balance transfer" farce — Egg — has introduced a 2% balance transfer fee "to discourage rate tarts". The disingenuousness of this is mind-boggling. I really would like to be at a press conference one day with these wankers. "Er, so you think that people should voluntarily pay more than they need to, and that looking around for a better price is morally wrong, do you?" "Well, no, but..." so why the pejorative term "rate tarts"?.

But the real disgrace is that it was the credit card companies that offered it in the first place, presumably thinking that customer inertia, that system that they have exploited for so many decades, would keep the customers once they started charging 19.6% interest. They were then SURPRISED that the customers promptly moved to SOME OTHER CREDIT CARD that was offering zero per cent interest. So, you have a choice, pay zero per cent, or pay 19.6%. "I'll take the zero per cent please, Bob". "Ah, well I'm afraid that makes you a rate tart". "Oh dear Bob, is that bad?"

This moral high horse is from companies that routinely shift maturing bonds into accounts that pay interest rates of 0.1%, companies that will not allow people with power of attorney over their parents' finances to park the money in anything other than the lowest interest-rate-paying account possible. It's from companies that want us to borrow more and more money and will not be happy until 50% of our expenditure is taken up in interest payments. Hell, it worked for the third world.

Poker has cleverly appropriated the phrase "bonus whore" as a compliment. I proudly proclaim myself to be an "airline whore" when people ask me which airline I use to fly to the US. Perhaps we should introduce "www.rate-tart.com", and embrace the intended insult.


BTW, for those wishing to piss of some bank people, I recommend walking into any NatWest branch and asking "is this the Royal Bank of Scotland?"

Comments

Rate Tarts? (Geoff C)

[(Anonymous)]

Actually the Rate Tart is supposed to be someone who just shops their mortgage around every 2 or 3 years for the next new deal that will give them a concessionary rate in exchange for 2 or 3 year handcuffs. A bit like me - 4.29% capped, from the wonderfully named Giraffe Mortgages - a brand of Bristol and West.

The 9 months zero rate transfer gang are a different bunch. amongst which I used to number myself - until I got bored and it got harder. The sad truth is that Capital One and MBNA seem to be running more and more of the more exotic cards and they refuse you a zero-rate card if you already have an account with them. Need a different label for them - Zero Sluts?

Even more fun - walk into an HSBC and ask if they can point you in the direction of Midland Bank?

Re: Rate Tarts? (Geoff C)

[jellymillion.livejournal.com]

Let's see. We want more business, so we introduce a loss-leader in the expectation that, once acquired, customers will stay with us through inertia and we'll have grown our market share. To get them through the door, we'll spend more money making sure everyone knows how simple it is to switch to us.

A year later, we're losing a goodly chunk of our expensively-acquired customer base, and worse, the ones that are going are the ones we were relying on to make up the losses when we started charging them a "commercial" rate.

So we commission a study and discover that we've made it so simple to switch and worse, educated the market as to the simplicity, that when our competitors introduce a similar deal, the very customers we want to keep promptly migrate away.

So now we have to operate on paper-thin or negative margins just to stay where we are and we can't go on doing that forever so we start to introduce friction to increase the resistance to the movement that we were so keen to reduce in the first place.

I bet there are a whole nuch of credit card companies that are wishing they'd never started this in the first place.

Mike