Be In The Black

Last year I got a little miffed at VISA in this space over their terrible and ill fated “smallenfreuden” ad campaign.

Read my original post here: #smallenfreuden, #biggenproblems

The whole message of smallenfreuden was to entice you to use your VISA card for the small purchases you’re going to make anyway, like a pack of gum at the convenience store, so that you can earn reward points on the card.  Of course what VISA didn’t say was that they charge retailers a fee to accept the card and that small purchases cost retailers more to accept.  They also forget to tell you that they really want you to run up a big bill so they can charge you interest.

Thankfully the back lash from small retailers and smart consumers was enough to force VISA to pull the campaign after only a few weeks.

Now Interac is getting in on the act.  For those who don’t know, Interac is the Canadian debit card system that withdraws money directly from your bank account when you make a purchase.  When you use a debit card on the Interac system you can never spend more than you have.  The fees to retailers are similar to those charged by credit cards but since you’re accessing your bank account with every purchase you can’t ever overspend, carry a balance and incur interest charges.

Interac is not a perfect system, but it’s a damn site better than paying the usury fees of credit cards.  I like this ad campaign a hell of a lot better than “smallenfreuden” that’s for sure.


#smallenfreuden, #biggenproblems

Recently Visa started an advertising campaign around the hashtag, #smallenfreuden. According to the twitter page @smallenfreuden Visa says that it’s the act of using your Visa card for the small purchases you’d make any way.

However; the unspoken message of smallenfreuden is a bit more sinister. You see Visa knows that most people don’t pay off the balances on their credit cards on a monthly basis. By making those small purchases on your card you are going to pay interest on them and thus feed their corporate profits.

Last year the Canadian government made it mandatory for credit card companies to tell people how long it would take them to pay off their balances by making only the minimum payment. Now I don’t have a Visa but I do carry a Mastercard. My most recent Mastercard statement told me that if I paid only the minimum balance I would be debt free in 26 years and 10 months! I don’t know about you but I think that’s a hell of a long time to take to pay for a pack of gum!

So smallenfreuden begs the question; if you were going to make the purchase anyway why would you use your Visa card in the first place?

I’m not going to tell you never to carry a credit card. I’ve done it, not by choice but as the result of a bankruptcy. I went for about 5 years without a credit card and I’ll be honest, it made life very difficult. There are some very good reasons to have the ability to purchase things on credit. But the point is that if you can’t afford to pay off your balance relatively quickly you shouldn’t be buying those things in the first place. There is nothing – not even a house – that is worth making payments on for 26+ years!

The bottom line is that the campaign for smallenfreuden is evil. Visa is encouraging people to stop thinking about money in concrete terms. If your small purchases are just a line item on a much larger bill you will tend to forget about them and everything will meld into the larger number. The larger that number gets the more likely you will be to think about it only in terms of the minimum payment.

So here is my challenge to Visa and anyone else who wants to join me. Every time I see the hashtag #smallenfreuden, I’m going to retweet it with a comment of my own and the hastage #biggenproblems. If enough people join me in this maybe we can stop this insane and evil campaign and turn the conversation back to people paying cash for the small purchases they’d make anyway because that’s what cash is for!