Can you remember when you got your first credit card?
Mine was automatically bundled into my NAB student banking package when I went to university.
At the time, NAB said it was a smart idea for students to have access to a “low-rate credit card” for “emergencies” (like bar night).
That card allowed NAB to begin building a marketing profile on me.
Through the positioning of minimum repayments on my statements and online banking, they trained me to see their credit limit as my money.
Then they began bumping up my credit limit.
That’s how the game works.
CommBank is doing this right now with its latest advertising campaign,
which targets young people to sign up for its “low-interest” Essentials credit card . . . instead of going through the hassle of borrowing money from their parents.
One CBA billboard says: “Because the Bank of Mum and Dad will probably give you a lecture, and you had enough of those at uni.”
Its TV ads show millennial kids having to suck up to their parents — listening to their dad’s jokes, eating their mother’s terrible cooking — just so they can borrow some money.
CBA’s tagline at the end of the ad says: “For when you’ve outgrown the bank of Mum and Dad.”
A spokesman for CBA said the ads aren’t manipulative in the slightest.
In fact, they’re in it to help young people.
“We believe it’s really important to help young adults develop good financial habits, such as budgeting and managing their money wisely,” the spokesman said. “As they move into full-time employment, their spending and payment habits change, and this includes using credit cards.”
That’s the corporate spin, though there’s no way they actually believe it. It’s all just part of the game.
To be fair, the vast majority of CBA employees are hard-working, diligent professionals who care deeply about their customers.
It’s just the top brass that are knobs. Tread Your Own Path! The Barefoot Investor holds an Australian Financial Services Licence (302081). This is general advice only. It should not replace individual, independent, personal financial advice
If you have a burning money question, go to barefootinvestor.com and #askbarefoot