Oh the hypocrisy from the Herald

I see the Herald has an article that quotes Bernard Hickey and other commentators where they are surprised that banks are offering freebies for people to sign up new loans – “buying your business with your money”.

Flat-screen televisions, cash for groceries and even iPads – banks are competing to offer more attractive prizes to sweeten home loan deals as higher interest rates are forecast.

But commentators warn the prizes should be viewed only as a bonus once a loan has been settled.

One says the giveaways are “essentially buying your business with your money”.

With little separating their advertised fixed mortgage rates, banks are dangling “free” giveaways to lure prospective customers from rival banks.

Oh how terrible…

Dr Claire Matthews, of Massey University’s centre for banking studies, said people should study the entire home loan deal – including fees, terms and conditions – before being tempted by cash or giveaways.

“It might be that if you’ve got two banks that are almost identical, and one is offering a 52-inch television, then, hey, you might as well go for the television as well.

“But if somebody is offering a better deal, despite the 52-inch television you may not be better off.”

Economic commentator Bernard Hickey said similar giveaways were seen during the 2002-2007 property boom.

“But then, the banks tended to simply use price as their main way to win market-share. This time, they are being a bit more cautious about that, mainly because they want to preserve their profit margins.

The cost of such incentives were often simply added on to the mortgage, Mr Hickey said.

“What they are doing with these offers, is essentially buying your business with your money.”

And what about the Herald? They offer free stuff to win subscribers…plus their reader promotions…they even use a call centre to beg people to stay with free newspapers.

What a bunch of sanctimonious hypocrites.

 

  • johnbronkhorst

    “One says the giveaways are “essentially buying your business with your money”.”
    So what!! I see this as like the flibuys argument….You might as well play the game, because you won’t get the product any cheaper if you don’t.

  • Lloyd

    At least the Herald calls Mr Hickey an ‘Economic Commentator’, which he is, instead of ‘Economist’ (which lazy twerps in other papers and at TVNZ call him), which he is not.

    • Dr Wang

      I’d just call him an ill-informed knob – we’re still waiting for that 30%+ property price drop that he said was coming…why should we assume he knows what he is talking about this time?

  • Phill

    It doesn’t matter whether you call him an economist, or an
    economic commentator. The guy is a goon and plainly doesn’t know how business
    works.

    Any “Giveaways” by business are paid for with your money. Whether
    hot points on your credit card, free milk in schools, Fly-buys, Sky TV giving
    free installs….It’s all paid for somewhere…..from the money you will give them
    in the long run. Check out the profits of the companies giving away free stuff.
    They don’t do it for the good of their health! The fact is, it’s cheaper to give away a TV than it is to drop a % point over the life of the loan.

    This just goes to show how naive and brainless he is, and
    the rest of the left leaners for that matter who believe that there IS such a
    thing as a free lunch. (Yeah right)

  • tarkwin

    The Horrid is just hacked off because this works for everyone else but not for them.

    • http://www.facebook.com/euan.rosstaylor Euan Ross-Taylor

      I might subscribe back to the horrid if they offered me a TV, but only until summer when I don’t need my fire anymore.

      • tarkwin

        You would want one of those 3D ones to make it worth while.

  • http://www.facebook.com/people/Donovan-Jackson/100001351422474 Donovan Jackson

    If anyone is stupid enough to borrow $500 000 so they can get a TV, then they deserve to be taken advantage of.

    • http://www.whaleoil.co.nz/ Petal

      I’m with this guy.

      • Whanga_Cynic

        Me too

  • Richard McGrath

    If Hickey thinks banks are “buying your business with your money” what does he think mainstream politicians do during every election campaign?

  • AnonWgtn

    So what is new – the banks must take a substantial proportion of blame for the housing crisis in Auckland. The EQ in Christchurch lurched the banks that way.
    A bank has only one job – TO LEND MONEY.
    The biggest culprit is Kiwibank who undercuts the market all the time, because it has unconditional guarantee – the NZ taxpayer, albeit that its solvency margin is very dodgy, which is why its parent NZ Post is in trouble – giving Kiwibank substantial money
    to support its solvency which would condemn it otherwise.

  • redeye

    Why single the banks out for buying your business with your own money? Toyota are currently running 3k work of Stihl products with every purchase of a utility. It’s been going on for years.

    Imagine the uproar when they start giving away .22 Rugers with every new account.

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