Have you noticed ads with your bank statement? Whether you receive your bank statement in the mail, or whether you receive it electronically through email, you might see some advertisements – and even coupons – with your banking information.
As banks look for ways to earn more from consumers, and programs like bank statement coupons can provide another source of revenue. Marketers pay for access to your data, or they pay the banks commissions for the deals you take advantage of. These deals might appear when you log in to your online banking, when you open your bank statement, or even be part of a “deals” or “rewards” program attached to your bank account.
You can get access to great deals, including special promotions, discounts on merchandise and gift cards, and other opportunities. In some cases, these programs work with the banking app you have on your smartphone, sending information right to you, based on your current location (hooray for GPS).
The Obvious Concern: Privacy
Your main concern, of course, is privacy. First of all, enrollment in most of these programs is automatic. You have to opt out of such programs if you don’t want your information shared with marketers. Ask your bank about these programs, and find out what you need to do in order to opt out if that’s what you want to do.
Realize that, even if your information is anonymized, it is still being collected and used. And, of course, there are ways that marketers can match up “anonymous” data with other databases to get a picture of exactly who you are. Even if they don’t know your name and other identifying information, your spending habits are being collected and analyzed by marketers in order to target offers to you.
What if You Overspend?
The other issue is that these targeted offers are designed to attract you, and increase the likelihood that you will spend money. You’re encouraged to spend money you hadn’t planned on spending. Even if you are getting a “bargain,” you are still spending on impulse, and that can lead to budget trouble.
Another issue is that discounts are offered in the hopes that you will spend more than you would have otherwise. If you are getting 20% off, there is the implication that you are able to get 20% more. So you still spend the money – and sometimes even more, since the perception that you are “saving” actually encourages you to overspend. And, of course, a straight up $5 coupon is usually used to lure you into the business. Once there, though, you are likely to spend far more than $5. These special offers can pull your budget off track resulting in wasted money, instead of encouraging true savings.
Approach special deals, offers and rewards programs from your bank with caution. While you might be able to find some good bargains and save a little money, by and large these are programs designed to encourage you to spend extra money – and to give marketers better insights into your shopping behaviors.
Tom Drake writes for Financial Highway and MapleMoney. Whenever he’s not working on his online endeavors, he’s either doing his “real job” as a financial analyst or spending time with his two boys.