Are the banks cash-rich and desperate for business?

I own several credit cards from local and foreign banks. Recently, two banks have called to offer balance transfer programs with interest rates as low as 0.5% per month, for tenures ranging from 6 months to 2 years. There was another that offered me a higher rate of 0.8% per month and when I commented that the bank’s rate is so much higher than other banks, I straight away got offered 0.5%! After thinking through for a while, I replied that I didn’t need a balance transfer after all. Then the balance transfer was immediately switched to one where the bank will just bank in the cash into my current or savings account and I could use it for anything I wanted. The bank sounded desperate to me, to offer me so many means to take up the extra cash I didn’t want.

There’s another that sent me a cheque for a certain amount, to be repaid in six months, interest free. Of course the one-time administration charge applies and I’m guessing the bank hopes that I’ll be a bad pay-master, resulting in them earning some interests in the “free” money they pushed to me.

And then there’s yet another foreign bank that sent me a card that offers overdraft facilities. I didn’t even apply for any but they had proactively created an account for me and encouraged me to go ahead and use up to a limit of RM8,000. Mind you the interest is not cheap, it comes up to 1.4% per month, which is almost equivalent to that of a credit card at 1.5% per month.

By now you must be wondering what my spending pattern is like on all these banks’ credit cards. Let me tell you…I have their cards but they remain in my drawer at all times! Does this mean these banks have a similar strategy in targeting non-swipers?

Anyway, judging from all these offers coming my way, one can conclude that the banks are facing intensed competition these days. Interest rates for loans are coming down and those offered for deposits are getting better. Bad news for the banks, but great news to the consumers!