There’s no such thing as £200 free from a bank, says RACHEL RICKARD STRAUS: Take the money, but keep an eye on what they get in return
If a restaurant offered to pay you to sit down and have a good meal, would you? Or if an airline said they would give you money to take one of their flights, would you say yes?
Whether you like it or not, I’m sure you’d be wondering: what’s the catch? You would be suspicious why they would pay to have you as a client instead of sending you an invoice.
Yet that is exactly what we are seeing from the big banks right now. Several offer huge cash incentives to anyone who transfers their checking account to them. For example, RBS, NatWest and TSB offer £200 and First Direct £175.
But, just ask yourself: what’s in it for them? After all, banks don’t do it out of the goodness of their hearts. They are for-profit companies, with shareholders to please.
And you can bet your two hundred pounds that they only offer you wads of cash upfront because they think they’ll give it back to you – and even more – later.
Cash in hand: you can bet your two hundred pounds that they only offer you wads of cash in advance, as they think they’ll give it back to you later.
It may be that once you are a current account customer, they try to sell you other products such as personal loans or credit cards that will make them a profit.
Or they may be hoping that you will leave lump sums in your account, where they will pay you a low level of interest.
Or maybe they’re selling you a paid account, with nice perks like phone insurance or free entry to airport lounges that you don’t really need.
Don’t think for a minute that they are doing this to help cash-strapped customers. Over the past fortnight, the big banks have made it clear where their loyalty lies – and that’s with shareholders and executive salaries, and certainly not with savers.
The big six boosted their profits by £7bn last year by raising interest rates for borrowers and not passing the bulk of recent rate hikes on to savers, their financial results show.
Bank bosses were dragged before Treasury Select Committee MPs last month to explain why they have so miserably failed to pass on rate hikes to savers. They made outlandish excuses, then walked away and carried on with the same practices as before. RBS and NatWest pay 0.65%, TSB 0.7% and First Direct 1.2% on easy access accounts.
I’m not saying for a minute that you shouldn’t accept their free money offers.
Changing banks keeps them on their toes. As Mark Mullen, CEO of Atom Bank, told me last week: “Loyalty to your bank is bad for your financial health.
In a cost of living crisis, these cash payments are of course welcome. If you can find a new bank that suits your needs better than the old one, then go for it. And take the money. But keep an eye on what they get in return.
No response from Ofcom on broadband price hikes
Regulator Ofcom has yet to report on the findings of its investigation into mid-contract broadband price hikes.
We believe that anti-inflationary mid-contract price increases are extremely unfair and should be brought under control by the regulator.
But then Ofcom has been very busy lately with other pressing matters. Last week, he held his Antique Phone Show contest on social media.
Twitter followers were asked to share photos of their old mobile phones and tell Ofcom about their “own golden handsets”. The regulator then took the time to compliment them on the dusty old handsets found at the bottom of the drawers.
Broadband and telecommunications providers must be shaking in their boots.
Email Dilemma
I still remember the exciting day when my family first had Internet access at home. Creating an email address was part of the process. Like many households, we were unaware that we could use other email account providers instead.
So I really feel for those who did the same, in good faith, and are now stuck with an email address that ties them to their broadband provider indefinitely. Yes, I know you can change your email address whenever you want. But, it’s hard to drop an archive of social interactions that spans years without fear of deleting something valuable.
Sky manages to let old customers keep their email addresses for free – why can’t other providers?
