It used to be good to stay loyal with banks. Now, you may as well be disloyal, refinance and be rewarded.
Clients regularly come to me and proudly announce that they’ve been with the same bank since they were little kids. They then ask me whether this puts them in an advantageous position to get a better rate on their loan. The truth is that loyalty may have helped you get a loan in the 1980’s, but the situation is very different these days. If you’ve been with the same bank since you had a CBA piggy bank, the chances are you are probably being stitched up. Disloyalty is the new loyalty. Whereas loyal customers are looked after with the same rate they’ve had for years, banks are giving new customers that refinance cash discounts, lower rates, better discounts, and all round far better offerings on all products.
This phenomenon isn’t limited to banks. I recently moved house and realised that my loyalty to service providers was a liability rather than a benefit. After some quick research, I cancelled and renewed Foxtel on half the price, slashed 10% on my power bills by switching companies, saved hundreds on home and car insurance by shopping around, and found an internet provider with unlimited download for far cheaper than what I’d been paying previously on an a tiny data plan.
I urge everyone to review your service providers and see whether you can save thousands of dollars. One tip is not to use the insurance comparison sites because they are not objective as they appear. With the power, I’ve found Momentum to be the cheapest but you simply need to call them with your last bill and check what they would have charged.
Big companies have completely devalued customer loyalty, so we may as well all reciprocate the feelings, hunt for the best deals, refinance, and get rewarded for being disloyal.