Consumer apathy means millions paying higher rates and missing out on better deals
Nine out of ten Singaporean credit card holders have never changed their card, and could be losing out financially as a result.
That’s the finding of one of Asia’s premier consumer finance websites, which says that customer apathy means many people are paying higher fees and missing out on the premier card deals to which they might be entitled.
According to a survey on behalf of EnjoyCompare.com website, 90% of people who own a credit card still use the first one they applied for, and have stuck with it for years, mainly out of brand loyalty.
“We’ve heard from people who have held the same card for years and years,” said EnjoyCompare.com Mark Hall, “And many say they’ve stuck with the same card even when they were told they could get a better deal elsewhere.
“That’s what we call brand inertia.”
The telephone poll found that:
• 90% of customers still use the first credit card they applied for
• 40% have three or more credit cards – a figure that’s grown in the last 12 months
• 45% said they would consider changing cards if they could get a better deal elsewhere
• 34% said they would only change cards to one offered by the same bank
“The interesting thing to note is that there is a hunger to find better deals,” says Mark Hall, “but that hunger only emerged once people were told these deals were out there waiting for them.”
EnjoyCompare.com say it’s within customers’ interests to consider changing their card. As their financial position and credit rating improves with age and increased salaries, banks can offer them better cards with lower rates and vastly improved members’ benefits. In short, people can save money and earn rewards by changing credit cards.
However, the Singapore-based money comparison website heard various reasons why people haven’t changed their credit cards:
• “This one works for me, so why bother?”
• “I thought all credit cards were the same.”
• “I got this card straight out of NS, and I don’t want to switch banks.”
• “I’m not sure about the annual fee.”
Despite the customer inertia uncovered in the poll, some financially-astute Singaporeans have already discovered the advantages of holding more than one credit card, EnjoyCompare.com says.
“As long as people control their spending and never borrow more than they can afford, premium credit cards make huge financial sense,” Mark says.
“One card for shopping, one card for petrol-pump discounts, and another card for foreign travel discounts. As long as you pay off the balance in full every month, they can literally save you thousands of dollars every year.”
Encouraging people to make the money-savvy step of switching credit cards, EnjoyCompare.com says: “It’s a customer’s market out there and banks are falling over themselves to offer the best deals. Make that switch now – you’ll be glad you did.”