USAA recently pulled its advertising from the Sean Hannity show on FOX’s news network due to the political content and thousands of clients are dropping their accounts!
While it’s a good thing to recognize market extortion when you see it, and even more impressive to take a stand and react to it actively, many people make decisions like this emotionally without considering related consequences. Moving your business from a company with whom it offends you to continue doing business is a positive reaction, but doing it properly with a little forethought for how it affects you can either hit or protect your wallet.
First, we all play the financial industry game and the banks and financial organizations are the ones making up all the rules. Learn what those rules are, how to play their game, and use them to your favor and against the system. Case in point, the consumer banking industry where you likely have your checking and savings accounts nearly went under (worldwide) in 2008 along with the ‘housing bubble’. You might remember the ‘too big to fail’ discussions and related consternation associated with it including signs of disenfranchised thousands which read, ‘where’s MY bailout?’ Since that time, my checking account only holds enough money to cover next month’s bills and I keep my wealth, my excess money, with other institutions that have proven more stable.
Learn the game and use the rules of the game against the financial institutions. The bank that sponsors your checking account is a good clearing house for your bills and handles funds transfers well, so let them process your payments for you. If they charge you a service fee for a balance under a specific dollar amount, $500 for instance, decide which is more important to you, a $500 backstop or the $10-15 a month fee. Learn their rules. Use their rules against them.
How does that apply to the USAA situation and dissatisfied clients pulling their accounts from this financial service provider? Your credit rating is largely based on the length of time you have maintained a positive relationship with banks and financial institutions. The higher your credit rating, the less expensive your life can be. Shopping for credit, auto and other insurance rates, as well as the clout that comes with a higher credit rating (even on a job search) can pay off in less expensive rates for many years. That’s money in your pocket.
While the length of the relationship is only one aspect of your credit score, you can maintain your credit card accounts where they are and only use them for expenses that you pay off each month, like gasoline for the car. You keep what the account is good for, a long-term relationship, and remove the benefit from the organization, zero balance equals zero profit. Add an account with another bank for longer-term credit use that may offer lower rates or better terms. Add to that the costs of tracking, maintaining, and continuing to advertise additional services to you on that account and you’ve completely turned the tables. You get a benefit and begin costing them money rather than giving them a profit source. Checkmate!
Depending upon the types of insurance you carry, if you remain uninsured for any length of time, it can trigger a rate increase at your new insurance provider. That idea is especially important with auto and health-care coverage. Replace your coverage, don’t just dump it! In addition, cashing in life insurance, if you have a more significant financial account than simple term insurance, can get you into paying taxes on gains to your cash value. There are ways to avoid that and use it to your favor without a lapse, and without tax complications. In addition, there are tax advantages to these types of accounts that most people have never heard of that could offer them a significant benefit.
If you know anyone that would like more information, please share this with them and invite them to contact me through davidpandone.com to discuss it with me. I hope that reaches the people that can benefit from the information before they do anything too hasty.
I have published is a six-issue newsletter available only to members of my website that reviews this and other topics. The section on credit, debt reduction, and credit strategy is four sections long, and is only available through the newsletter. Go to davidpandone.com and find the [dp] logo in the right margin (or main menu), register, and subscribe and you’ll receive that series over the next two months (one issue each 10 days). I offer a money-back guarantee: because it’s FREE…
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