Why banks give so many things to their customers for free Here are the reasons

  • By David Molnar
  • January 23, 2018
  • Comments Off

Only naive people can think that banks act on the basis of altruism or even philanthropy. Every action taken by financial institutions is aimed at making them even more profitable. We have to accept this, which does not mean that we cannot benefit from it. The consumer market forced banks to use different lures on their customers, so today there is no problem with getting something for free by deciding to open an account with a bank. The question is: why do banks give out bonuses? Find out about the main causes.

The banks need our cash

This is a fundamental and, in practice, the most important reason. The bank lives on thanks to the money that its customers bring to it. You may not be aware of this, but your funds deposited e.g. into a savings account are not at all on it. They are in continuous distribution. The Bank lends them to borrowers and other banks, earning money on the occasion of lavish interest. Therefore, banks need to encourage customers to make deposits, as they need a steady flow of cash.

Ways of staying loyal

A loyal customer is a big treasure for the bank. It is very likely that he will not take his deposits and transfer them to another institution for years. He can also persuade his family and friends to open an account or deposit. Giving bonuses is therefore an effective way to persuade the customer to become permanently attached to the tank.

Cheap advertising

Free add-ons to accounts, deposits and other financial products are so attractive that they are immediately available for trade portals and blogs. In this way, banks can easily reach potential customers without spending a penny on traditional forms of advertising. It simply pays off.

Wicket for introducing other charges

Has the bank given you private third party payment card insurance? Super. However, you must be aware that in the future you will be informed about the introduction of a fee for e.g. keeping an account. In this way, banks protect themselves against uncontrolled exodus of their customers. Many people may think: OK, the bank takes the money for something, but on the other hand it gives me something different for free, it still pays off anyway. Smart, right?

Banks will not lure their customers with bonuses unselfishly. There is always a strategy behind this. In practice, it is almost impossible to use banking services completely free of charge. It is important to be aware of this.

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