Credit Unions vs Banks: Banks Have Long Resorted to Bribery
Have you been receiving offers of incredible sums of money for opening a bank account recently? Banks started doing this some years back, and the amounts have grown from $50 to $100 to as much as $400 today.
This is nothing new; banks have been bribing new customers for years. But they used to do it in a much more interesting way.
Back in the Go-Go Sixties, Banks Made Bribery Fun
For instance, back in the 1960s there were laws in place that greatly limited the amount of interest banks could offer on savings accounts.
In those days, banks couldn’t offer you access to flashy investment like stocks, either. There was a “church and state” quality in the regulations separating Main Street banking from Wall Street banking.
Furthermore, they couldn’t offer you free cash for opening an account.
To get new business in the door banks had to resort to non-cash offers of merchandise. As is the case today’s bank marketing, there was an escalation in the value of the merchandise as banks competed to out-do one another.
They started out offering calendars, pens and plastic rain hats for ladies, (yes, you read that right).
Later, the premiums included such things as transistor radios, clocks, dinnerware and coffee makers.
A recent article in Bankrate chronicled other items including sterling silver candlestick compotes, kitchen cutlery sets, lady's billfolds, photo albums, cameras, bird-cage planters, cleaver sets, record albums, scholarships and other goodies. Even color TVs.
“At Christmas, the Manhattan Savings bank would flood its lobby to stage an ice-skating show. Later, the bank would drain the lobby, and host a dog show featuring "midget handlers," Bankrate said.
Today, It’s All About the Cash
Now we get offers of money. It might be boring, but this is effective marketing. This is especially true now that the offers have gone above $100.
Banks will do just about anything to get you as a customer because, once you’re on board, they can tempt you with all sorts of things that are hugely profitable, for them.
You see, those pesky regulations are now gone, and banks can sell you all sorts of “Wall Street” products.
You’re Still Better Off at a Credit Union
But despite the 3-figure bribery, you’re still better off at credit union. Credit unions might not offer you bribes to open an account, but they do offer lower fees, lower interest on loans and higher interest on savings thank banks generally do.
Credit unions use the money they save by not engaging in hugely expensive marketing schemes to offer you the best deals on the financial services you need.
Oh, and because credit unions are not-for-profit, you don’t have to worry that they are just offering you things that are good for them – and maybe not good for you. CUs have no incentive to do this.
In the end, bribery is expansive for banks – and you can bet they get the money back from you eventually.
About Today's Credit Unions
Today’s Credit Union is a team of marketing and editorial specialists with deep credit union experience. TCU was created to address the challenge Credit Unions have in making social media marketing really work for them each day. They take no advertising, and have no agenda outside the CU movement. TCU’s only business is serving Credit Unions and their members.