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When customers are more like slaves

March 17, 2009

Remember the reams of documents you signed when you bought a house, a car, insurance? How about when you applied for credit cards? Did you read the fine print before you signed?

I’m talking about scouring through each and every clause, asking if it means this or that, and querying what if I object to this or that clause.

Or do you just tell yourself that since nobody ever kicked a fuss about the fine print, then it must be harmless?

I ask because while we like to believe customer is king, we stop believing it when we sign up to buy money. We concede every term.

Wait. Buy money? How do you do that?

Well, every time you swipe your credit card or get financing for a house or car, you are buying money from a trader – the bank. Some call it a cash advance. I call it buying money. The price tag is the interest you pay. And just like buying underwear, you’d shop around for the best price.

Since you are the customer, you’re king and kings deserve the red carpet treatment. Right? Wrong. Apparently not when it comes to buying money.

Honestly, I can’t think of any other situation where we surrender our lives to the seller after agreeing to pay an atrocious price for his product. To know how atrocious, calculate how much you would have paid the lender for the money you borrowed to buy your house after 15 years and compare it to the original selling price.

Original house price: $350,000

Amount borrowed: $300,000

Amount paid to lender after 15 years: $600,000

Your price tag: $300,000

Maybe we’re so desperate for cash we feel we have little choice but to accept any term they set. This is how the relationship shifts from that of customer-provider to slave-master.

Bear in mind that banks are like restaurants in that they too will go bankrupt if people like you don’t buy their products. Nobody forced you to borrow to buy a house or get a credit card.

I just thought its funny. When we’re unhappy with our ISP, we call them up to yell at them but when we’re unhappy with the banks, we suddenly get all coy. Yeah, how do you yell at them when you’ve got $17,851 owing on your credit cards. Could this be why people treat money traders differently, even though there’s really no difference between buying a bank loan and buying underwear, technically speaking?

Moral of the story? Its a lot more exciting selling money than selling underwear. 🙂

(Post inspired by a friend in Shanghai…)

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4 Comments leave one →
  1. March 17, 2009 9:22 am

    Lesson of the day, don’t sign too much with your credit cards so you will still have the rights to yell at them 😛

    Yeah, better a small slave than a big one eh. 🙂

  2. LC Teh permalink
    March 17, 2009 10:54 am

    Oh yeah… I ‘yelled’ at one bank guy after I cut up my credit card because they charged me while other banks offered me free annual fee. He ‘begged’ me to continue and sent me a new card and gave me free annual fee… but for only 1 year. Felt like a king for a while…. The next year I cut the thing again.

    Whenever I get a new card I always throw away the PIN. My motto: Live within your means. Live like a king. Don’t look at your neighbor’s latest ipod, plasma tv, bmw, golden arowana, etc and you won’t feel poor.

    Oh yeah, that annual fee ruse… if that doesn’t work, they offer to raise your credit limit or upgrade you from gold to platinum for free. With ‘privileges’, we feel valued and important. The venus flytrap never felt so good.

  3. March 17, 2009 11:00 pm

    I had a bank who told me this, if I borrow this X amt, they will give me premier customer service at the bank, throw in some free for life platinum credit cards and free dinning vouchers. After I paid back X amt, they took it all away. 😦

    They must’ve dangled a large amount to you, large enough to make annual fees and vouchers seem like peanuts compared to the profit they stand to make. Nothing is free I suppose.

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