Personal Finance 

Don’t Get Emotionally Attached To Banks, Credit Cards, Financial Stuff

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I was reading an article in Cards & Payments, a credit card industry magazine, that discusses the rising popularity of personalized cards, those that have your picture, or a picture of your alma mater or company, or some other distinguishing characteristic that makes you feel more emotionally attached to the card. The most interesting part of the article were the following statistics on photo cards from a Datacard Group research study for 2005-2006:

– 62% of photo card customer’s outstanding balances are higher than the U.S. national average.
– 50% fewer customers are likely to switch to other cards or destroy their cards when renewal time comes.
– 34% of photo cardholders’ monthly volumes are higher than the U.S. national average.
– 15%-20% more transactions occurs with a personalized card than with one that is not personalized.
– 2%-5% of photos submitted are attached to card applications, suggesting photo cards draw new customers.

Cards & Payments is an industry magazine so they’re portraying the state of the industry so that credit card insiders can make decisions, they’re not trying to sell a particular product or pimp out some service and they certainly aren’t on the end consumer side. That’s the perspective I have when I see those statistics and they show that these personalized cards work because they tap into vanity. The basic idea behind the article is that if you feel attached to a card, say because it has a football logo on it or an American flag (Discover card popularized these), then you’re more likely to use it even if the financial reasons aren’t as strong.

Do not get emotionally attached to your financial transactions, they should not be about emotions, they should be about numbers and what makes financial sense.

For example, Vanguard is great because they have low fees, reliable service, and I’ve never had a problem with them. If Vanguard sent me a handwritten letter each quarter telling me how much they valued my patronage, I’d certainly be impressed. However, if they sent me a handwritten letter saying they were going to quadruple their fees then I wouldn’t stick around because Fidelity makes better sense financially and they have a similar reputation. When it comes to business, and personal finance is business, keep emotions out of it and don’t get attached. You might get along with the local teller at your bank but if the rates aren’t favorable or they aren’t willing to nix a fee, go to another bank. Other banks have really nice tellers too. 🙂

{ 7 comments, please add your thoughts now! }

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7 Responses to “Don’t Get Emotionally Attached To Banks, Credit Cards, Financial Stuff”

  1. Justin says:

    Of course, the question is do people who have these cards use them more, or are people who use their cards more the ones signing up for personalized cards. They don’t touch on what’s cause and what’s effect.

  2. jim says:

    No they don’t but you can appreciate that these personalized cards are gimmicky and tap into the vanity element so I can understand why someone would use a card with their face on it more often than not… I dunno, just spurred some thought on my part.

  3. dong says:

    Sometimes, it’s just laziness. I don’t close alot of account because it’s a pain in the ass sometimes to get them closed.

  4. pcooper says:

    I might use a card with my picture on it just because it would seem more secure… It may be more likely for someone to glance at it and notice that it’s not me than for somebody to check my signature.

  5. plonkee says:

    I think it can be worth paying more for good customer service from financial organisations (or rather not using a really cheap product with poor service).

    I haven’t seen personalised cards over here in the UK yet. I wonder when they’ll bring them in.

  6. Patrick says:

    Oh, but I loooooove my bank! Seriously, they are awesome! But, I agree, if they start cutting corners or increasing fees, they’ll go right to the curb.

    Don’t you think it’s amazing that people make financial decisions based soley on the fact that the credit card they want to carry has the logo of their favorite sports team, or a picture of Tweety Bird? Never mind that it has a 25% interest rate… It has style! 😉

  7. If it’s a Hello Kitty credit card how can I resist?

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