Banks are in Business as well

Nowadays marketing agents just climb on your back until they get their piece of incentive in the form of commission for whoever they work for. Bank salespersons are no exception to this rule. The huge benefits they show you in their sales pitch for any product can make you feel you might be a millionaire in a few years. Take a credit card sales pitch for instance, where the sales person would show you the heaven and beware that if you are not capable of handling the heavenly features of the credit card it can turn to hell in no time.

Some people think that banks are just crazy enough to offer huge cash backs, sometimes up to 5% or have that gorgeous loyalty points program that creates an urge within to spend more and even more. But does it ever come to our minds that banks are doing business as well, in their own shrewd way! At times its wise enough to buy in cash from a small street shop which is reputed for its quality and goodwill rather than a mall with a credit card where the same product might be 10 to 20 percent costlier. Well, you might be getting a cash back of maybe 1% but then look at the difference. The bank would surely be earning 2 to 3 percent on sales from the merchant to return a minor bit to us, that too in a very clever way. The merchant would add the charges to the cost of goods passed to us.

Recently I had an experience with RAKBank where they managed to bifurcate my international spends and local spends on the credit card and the return was not even the 1% that was the usual supposed payout thought the expected percentage was higher. Banks do know their way around when it comes to making profits and posting the same to their ledgers for shareholders. The truth is, that is what banks are for. The sales person would show the possible benefits that a person can derive but those are rather for the very rare cases and not on a general base.

Every wise and sane person would inquire both the pros and cons before falling prey to the hunt. I remember a sales person who looked at my statements and told me that “this is the way a person should really use a credit card and to tell you the truth a bank would not really gain anything from a person like you“. The bank’s job is to generate profit and more profit from interest sources which by all means I do not comply with and therefore people should always keep their accounts straight and balanced. To have a clear view of the banks’ policies, one should remember the ways of Shylock and his character in the wonderful work of Shakespeare,  “The Merchant of Venice”.

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