Loyalty is for Losers

Remember years ago, when you could walk into a bank or a bar and they would greet you by name? If you visited an establishment enough, you’d be known as a “regular.” It’s a good feeling to be recognized. It was cool to be a regular.

“Hey there Abe,” people would shout in unison, “Welcome to the Bunny Ranch.”

Those were the days..

I say those were the days because it used to be rewarding to be loyal. You know, work for a company for long enough and they would treat you right (with a pension if you’re lucky). You would visit the same store and they’d be sure to take care of you. If you had a complaint or needed a favor – people would bend over backwards for you, simply because you were loyal.

Boy, Have Things Changed

It’s not rewarding to be loyal anymore. In fact, I would argue the exact opposite. It’s cool to be new. It’s nice to be unknown.

A few years ago, Ally Bank actually ran a few commercials with this theme. If my memory serves me correctly, adults would entice little kids to join some sort of group by offering them ice cream, toys and all sorts of goodies. The kicker was that only the new kids to join the group received the perks. Those that had been present for a while missed out on all the incentives.

“Can I have some ice cream?” asked the little boy. “No, you’re not new.”

It’s funny to laugh about it when it’s on a Youtube channel but what about when you’re facing it in “real life?” It’s not much fun switching services every couple of years in order to get the perks, but it can certainly pay off to do so.

It’s a Game, Play It

Here are a few things you should consider changing every few years in order to get the best offers – those offers only available to newbies.

Cable

Advantage

• A lot of cable companies will offer a special rate to new households for a short period of time. I’ve seen 3 months, 6 months and up to 12 months.

Disadvantage

• Some providers will charge a cancellation fee.

Credit Cards

Advantage

• This one should be quite obvious. ALMOST every credit card I’ve seen has an introductory rate of 0%. I’ve seen this promo rate for 3 months, 6 months and up to 24 months (on balance transfers). From an economic standpoint, borrowing at 0% is heaven and it’s inopportune to not take advantage of this (assuming you can earn >0% elsewhere).

Disadvantage

• Credit scores are a tricky thing. I’ve seen people punished because they have too many credit cards and I’ve seen people hurt because they don’t have enough credit cards. Since a portion of your score is based off Credit History (longevity of each tradeline) it’s typically best to keep your oldest card open, regardless of rate.

Banks

Advantage

• A lot of banks offer special perks and discounts to new members. Whether it’s special discounts on loans, $100 bonus for a new account, or free ATMS anywhere – the incentives can be tempting.

Disadvantage

• I can assure you of one thing, banks know how to make money. If a bank is offering $100, they have a plan to earn that $100 back (and some).
• I don’t recommend switching banks often. If you incur a charge on your bank account, banks will typically take the length of your relationship into consideration. The same can be said if you’re hoping to cash a check and you don’t have a covering balance.

Insurance

Advantage

• It’s a good idea to look into switching insurance policies from time to time; it doesn’t matter whether it’s Life, Health, Home or Car Insurance. Rates and expectancy tables are always changing. Why not see if your premium can get you extra coverage OR see if you can get a cheaper premium with similar coverage? With the inception of the internet and quote comparison sites, it’s never been easier to find cheap car insurance.

Disadvantage

• Ugh. Um. Hmmmm. I can’t think of a reason why you wouldn’t shop for better prices.

Question for the readers:

Do you find yourself sticking with the same companies or bouncing around in search of the next new incentive?