Is Loyalty Costing You More?

I have always been a loyal customer.

I’ve been with one telephone network provider for over 6 years. I’ve been with the same bank for as long as I can remember. I’ve been going to the same hairdresser since I moved to London.

You get the idea.

I took my time to shop around. I tried out different products and services and found the ones that worked  best for me. I focused on experience  and was prepared to pay a little extra to make sure I got the best customer service (I get easily frustrated when I don’t get the help I need or have to explain something over and over again) and “an extra touch” (a cup of coffee while getting my hair cut at my hair salon is just one of the examples).

Times have changed. Lately, I have been thinking whether I am getting the best value  out of products and services I have used for years, and whether it is time to shop around to see if I can find the same service cheaper elsewhere. Yes, my newly found frugal side has been worried sick a little worried lately that I may be paying over the odds for something that I can get cheaper from a different supplier.

Where did I start? My bank, of course.

I have an account with one  UK bank. I like to handle my financial affairs in one place and when I sign into my online banking I see my main bank account, my credit card, my loan and my savings account. Sitting nicely in one place. I wonder why this has been so important to me? I don’t pay any monthly fees for any of my accounts. In fact, I get some extra services (such as mobile phone cover and extended warranty to name a few) for free. I used to work for this bank and got to keep all the benefits when I left.

So why would I want to switch banks?

Well… I am not switching banks. I am opening a basic bank account with a different bank.

I want to have a choice. You all know that I am currently paying 15.9% in interest charges on my loan. This is a lot of money, and my plan is to reduce this to an interest rate that is below 10% in the very near future. Now, my current bank may offer me a better deal. However, I want to make sure this is the best deal I can get before making any alterations (and paying a fee for doing so) to my existing agreement. Some banks in the UK will not even consider giving a loan out if you are not their customer. After extensive research and general feedback from my friends, I decided on a bank where from now on my salary will be paid into and all direct debits paid out from.

And the best part?

They transferred £100 into my account when I switched to them. Hold on… this is not all. I will also get £5 transferred into my account every month (that’s £60 per year) if I do not use overdraft (which I chose not to have so this is not a problem) and keep my salary and my direct debits with them. Done!

I figured I didn’t care so much about loyalty anymore. If I can save a little bit of money by switching to a different service provider or get a little bonus from them for doing so, why not go for it?

Over to you now, my blogging friends. Is loyalty costing you more? When you shop around, do you normally go for “an extra touch” or lower cost?

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23 Comments

  1. Those kickbacks from the new bank are awesome, congrats! I don’t usually have a problem with switching things when it comes to big business (like banks, stores, etc.), but for more personable things like hairdresser, tailoring, etc., I go to my go-to’s that I know do a good job and are reasonably priced. They might not always be the cheapest, but I trust them whole-heartedly, and for me that’s key in keeping my business (plus, I refer like crazy as a sign of thanks).
    anna recently posted…Are Biometrics Like Fingerprint Scanners for Passcodes a Safe Idea?My Profile

    1. This is the first time I switched banks and I feel like I’ve cheated on my old bank with a much hotter new bank, haha! Well, I have two banks now, can’t go wrong! 😛 I agree with you on more personable things, although my hairdresser charges a lot. Not sure I can afford her services, I’d rather put this money towards my debt.
      Eva @ Girl Counting Pennies recently posted…Is Loyalty Costing You More?My Profile

  2. I´ve been very loyal to my bank, not sure it´s a good thing..but my parents opened a bank account for me when I was only a toddler, so I´ve been using the bank my entire life. Besides, it´s the biggest and most secure bank in Norway, and very accessible when I´m traveling, so I guess there are just a lot of pro´s to still using the bank.
    The Norwegian Girl recently posted…Blogging CareersMy Profile

    1. I’m picky too, Wendy, you have NO idea, haha! I can’t be too picky though if I want my debt to be gone asap 😛 Do you not think though that your hairdresser is not doing her best anymore since she probably knows you’ll come back to her anyway? Sometimes I find this is how companies operate: they want your business and once they get it, they relax!
      Eva @ Girl Counting Pennies recently posted…Is Loyalty Costing You More?My Profile

  3. £100 plus £5 per month is definitely an incentive to move banks! I did the same last year, for a similar deal. On service providers nowadays, I always go for the lowest price. My hairdresser is probably the only exception, since I really like what she does to my hair so I use her loyally every time – but she is cheap as chips anyway!
    debtfreeoneday recently posted…Save Money and Swap! 18 Swap Websites ReviewedMy Profile

  4. Benchmarking your regular services is a great activity to do every now and again, just to make sure you’re getting the best value, as you noted. Now that you mention it, it’s probably time for us to shop our insurance, our internet, etc.

    Thanks for the reminder!
    Done by Forty recently posted…How We Negotiate, Part IIMy Profile

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