Comments on: Why Do Rich People Get All The Discounts?

By: Dinuka

Dinuka — Thu, 26 Jul 2012 07:57:46 +0000

Well yeah I guess…SL currently has some 3000 odd Premier customers. All part of the 80/20 rule followed by most businesses and most banks (80% of the money is owned by 20% of the bank).

By: Patriot

Patriot — Thu, 26 Jul 2012 07:15:25 +0000

That’s a pretty low bar to set to determine if someone is wealthy. If all it takes is to have Rs7.5million (about US $55,000) in liquid cash, you would be hard pressed to find anyone in the Tamil Diaspora who doesn’t qualify as “rich”.

By: Jack Point

Jack Point — Thu, 26 Jul 2012 06:35:59 +0000

I was about to explain but Dinuka beat me to it.

Put more simply and positively the bank arranges the discounts, they bear a part of the cost and the rest is on the vendor/merchant.

The idea is to retain customers by giving them something of value (in the form of the discounts) so that they don’t mind keeping their money earning low interest rates at the bank. Its a marketing cost for the bank and more effective (I think) than spending on advertising.

By: Gungan

Gungan — Wed, 25 Jul 2012 19:15:56 +0000

Actually the bank is only partly sharing the money it made on the rich guy with him. Hence no reason to give others the discount.

By: Dinuka

Dinuka — Wed, 25 Jul 2012 16:12:49 +0000

Here’s how it works *deep breath* rich people maintain huge sums of money in a bank and get back, say 7%, the bank uses this money for loans @, say 17%- loans are usually taken by people who don’t need it (people like me and you). the bank basically makes a profit of 10%. If we don’t pay back our monthy interest we get shafted by magic mathematics that even the people at the bank can’t explain (I’ll tell you why later).
The bank uses this 10% profit to molly-coddle rich people by offering them discounts like the one above so that they’ll move more money to said bank which will in turn have more money to give hapless suckers like us…so in effect you and I and everyone else who borrows from a bank in the form of loans and/or credit cards are mainting the comfy lifestyles of the rich.
Oh and the magic maths I was talking about? Well it’s complicated, so I asked someone to explain it to me and they couldn’t in fact there was only one person in a department of over 100 who was able to explain it and even then he said it was pretty shady. I’m an ex-employee of HSBC and I left that bank because it makes its profits by screwing people over (all banks do).