Your Loyalty Could Be Costing You

No, I’m not talking about your loyalty to your spouse or significant other. What I’m referring to is the companies you regularly do business with. Your loyalty to them could be costing you a lot of money.

Companies used to reward loyalty. Take pensions, for instance. It used to be that you went to work for a company after finishing school and you worked for that company your entire career. Both my father and father-in-law have been working for the same company their entire working lifetimes. In exchange for our loyalty, the company provided us with a nice pension for retirement. Today, pensions have all but disappeared.

This same sentiment carried over to the consumer world as well. Now, companies routinely punish loyalty while rewarding new customers with specials and discounts. This trend is taking hold in more and more industries. Below are some specific areas where your loyalty could be costing you.

Cable and Satellite Providers

These companies are among the worst when it comes to punishing loyalty. How many times have you seen an ad for a steeply discounted rate for TV and internet service? If you read the fine print you’ll see that the rate is only valid for new customers and only for the first six or twelve months.

To get the best deals, you need to shop around every time your contract ends. If switching providers sounds like too much work, at least make some calls to competing providers and ask for their new customer specials. Then use that information to negotiate a better deal with your current provider.

Banking Services

Big banks love to reward loyalty with increased fees and minimum balance requirements. They don’t care about you, your family or your future, no matter what they might claim. To get free checking and better service, go with a credit union or online brokerage company like Schwab or Fidelity.

When it comes to savings accounts and CDs, there isn’t one bank that consistently offers the best interest rates. To find the best rates, go to Bankrate.com and select the product you’re looking for. Rates are updated daily, so you can be sure you’re always getting the best rate for your savings.

The Dentist Office

Occasionally when I pass a dentist office I’ll see a large banner announcing a “New Patient Special”. This could include an exam, x-rays and a routine cleaning. As an uninsured college grad on a strict budget, I took advantage of one of these offers a few years ago. At $85, the service was as good as I received from my regular dentist in the past. If you don’t have insurance, you could save over $100 using these offers.

Car and Homeowners Insurance

Insurance companies have different methods for determining the rate they will charge you. Because of this, you might be overpaying for insurance. Take car insurance, for example. Young men aged 18-24 are notorious in this industry because of their high accident rate, so they tend to have a hard time finding reasonable coverage. Progressive is known for taking on this group at lower rates than other insurers would. This isn’t a guarantee, but it shows that comparing rates can save you real money regardless of age.

It’s a good idea to compare rates for car and homeowners insurance (or renters insurance) every 2-3 years when your premium comes due. Sites like NetQuote.com and Insweb.com can help you get quotes.

Grocery Store Brands

Your loyalty at the supermarket could be costing you greatly. The typical family spends $6,500 a year on food. By shopping at discount stores and Walmart for the majority of your groceries, you could save 30%, or about $2,000 a year!

As I mentioned in a previous post, buying store brands is one of the best ways to save on groceries. But what if you just can’t bring yourself to try generic? Then look for the brand that’s on sale, and combine it with a coupon when possible. A couple of examples will drive home the point.

I’m a big frozen meal nut — I eat them 5 days a week at work instead of going out for lunch. There are certain meals I like, but I’ll only buy when they’re on sale. If none of my usual suspects are on sale I’ll try something new.

My wife really likes ginger ale, and sends me to the store weekly to buy some. There are always about eight different brands, but I only consider ones which are on sale. She gets her ginger ale and we save on our grocery budget!

Never be afraid to try things differently from the way you’ve always done them. You’ll save dough and you just might discover something that works better in your life.

14 thoughts on “Your Loyalty Could Be Costing You

  1. Great advice! I recently decided to bite the bullet and completely cancel my cable television completely. This was a big step but saved me huge $$. You’d be amazed at how much programming is available for free online streaming from the networks. I even set up a little website for myself to be able to “surf” for shows to watch. You can check it out if you like: http://cablefreelisa.blogspot.ca/ and http://cablefreelisausa.blogspot.ca/ for american network shows. I can watch just about anything I like – for free!

    • Glad to hear you were able to save money by canceling your cable. We did the same thing last summer and not having a cable bill is awesome. Thanks for the websites! I’ll check them out.

  2. Some cable and satellite companies will offer to even pay your cancellation fee if you leave your current company.

    I love my food so I find that often buying store brand is not cheaper because it is less likely to go on sale, at least where I am. I also find that some “brand name” foods taste better. I pretty much stick to buying only when food is on sale and stocking up if I can—hard to do in a small one bedroom apartment—and only splurging if I really, really want or need it.

    • Interesting, I haven’t heard about companies being willing to pay your cancellation fee. It makes sense that they would though!

      I’ve also noticed that some store brands are more expensive than the name brand. For example, a grocery store where I live routinely prices their private label ice cream $2 more than name brands that are on sale. In that case, I use the unit price to see which is a better value. I’m not too picky, so it works for me 🙂

  3. I definitely agree on loyalty to banks – I keep the same current account for ease of transfer, but every year it seems banks offer “introductory” ISA savings rates which they then drop by 2-3% after 12 months. Good excuse to switch banks after 12 months, then!

    • Good observation. For a lot of people, switching banks is a real pain. Even if the bank starts charging a monthly fee for the account it’s not worth the switch for some people, especially if they have all their bills set up to pay automatically with their bank.

  4. My husband had been a Wall Street Journal subscriber for 15 years when he finally cancelled because new subscribers were only paying 1/2 of what he paid. That’s about a $130.00/year difference! He even tried getting a “new” subscription for his Nook and they wouldn’t do it. So now they no longer have our business.

    • I noticed the same thing! I’m currently on a trial 9 month subscription with WSJ. I looked up the rates for regular subscribers and it’s several hundred dollars a year. That’s not worth it to me, when you can get so much news for free online. 15 years is a lot of time. They need to treat their loyal customers better if they want them to remain customers!

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    • That’s great to hear! If you can do without the sports networks, you can get several local channels for free using a digital antenna. Visit antennaweb.org to see which channels are available based on your address. I get about 40 channels free where I live, and the signal is actually better than if it came from the cable company!

  6. I agree on all of these. We save a lot on our grocery budget by not being brand loyal. Whatever brand is on sale is what we buy. We also do a decent amount of couponing to “stock up” on brands we like and use regularly. If there’s a sale and coupon deal on Colgate Max fresh (our “favorite” toothpaste) and I can buy it for less then $0.25 I buy 5-6 and put them in the pantry to save for later. That way I get the the brands we like without paying full price.

    • Hi Kari,
      Stocking up when items are on sale is a great idea. It takes patience and a little time to find deals like you’re referring to, but you can save a ton on your favorite brands.

      Of course, you have to have some storage space in your home to accommodate extras. I like to eat frozen meals for lunch during the week, so I try to do the same thing when they’re on sale. I wish we had an extra freezer so I could really take advantage of low prices.

      Thank you for your comment!

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