The Enemy of Trust

It’s not difficult to understand why the banking sector breeds so much distrust in the minds of many Americans. This distrust is becoming even more exacerbated by second—or third-party accounts about their friend’s neighbor getting foreclosed on and slowly switching to first-hand accounts, where more individuals have their own stories about that time at the bank where they were sold a shovel, which only put them into a bigger hole. That shovel? Credit cards.

My time within the sector has been short compared to my peers, but in that time, I’ve worked in various roles with various departments. During this time, I’ve kept my eyes on the ever-growing sales culture trend aimed at the promise and motivation for employees to reach higher positions if their “numbers” are up.

A Forbes Advisor article reported that 600 million Americans open credit card accounts, based on 2Q 2024 data from the Federal Reserve Bank of New York. Outstanding credit card debt now sits at $1.14 Trillion. Generation X reportedly has the highest average credit card debt, at approximately $9,123, while baby boomers and millennials follow behind at $6,642 and $6,521, respectively.

Click on the chart to see the Forbes article.

Credit Cards are a lucrative business for financial institutions, and the more products a consumer has with a financial institution, the less likely they are to leave, creating an environment previously known by a specific large bank as the “Eight-is-Great” mantra.

I know and worked within the “Eight-is-Great” environment, and I’m happy that I pushed against it because it didn’t feel like the right thing to do. I still don’t think it’s the right way to conduct business.

One day, while helping my branch manager with balancing, we discussed how I could think about advancing the ranks without the “numbers” completely disregarding my background and education. I left shortly after with no intention of ever returning to an environment preaching the dichotomy of customers first while shoving credit products to their consumers.

The fallacy about a good salesperson would rise the ranks, become a good leader without managerial skills, and be assumed to be picked up because of their sales abilities. Perhaps the notion that knowledge translates to a better sales approach and ability to counteract a customer’s rejection. However, it’s the soft skills and ability to build trust that improve one’s sales numbers but stop and think about what this means for a moment.

Someone gifted with natural or self-developed soft skills with the incentive to sell as many credit products as possible. The incentive doesn’t put the customer first but rather the bank employee. That’s not trust but is more like a Venus flytrap luring its prey with the sweet nectar smell, only wanting to trap you slowly and digest you fully.

There was a time when I would encourage people to try their local banks before going to the nearest Big Five bank, which is found at every corner, littered throughout one’s city like a fast-food chain because once federal regulators dug into the operations of a specific large bank in the mid-2010s, they found hundreds of thousands of unauthorized credit card applications and 1.5 million unauthorized deposit accounts, resulting in millions in fees generated by the bank. If one of the giants conducts business this way, the likelihood of the other giants following suit in the ever-competitive landscape is high.

However, now smaller banks, in an attempt to compete and grow profitable to survive against the banking giants, have been following in the footsteps of the giants pushing credit products, not having learned a thing.

My recommendation mindset has slowly shifted from local to shopping at multiple financial institutions. Because of the associated headaches, the likelihood you’ll change banks is small. Again, the mantra “Eight-is-Great”: Once a consumer reaches a certain number of products with one financial institution, the likelihood the consumer will leave is small because it will mean cutting ties with all these products and transferring them to a new financial institution.

Shopping for a bank shifts the burden onto the consumer with a 40+ hour work week with families and other commitments. How can one also add the burden of shopping for their banks when they already have to shop for many things? Unlike choosing between Costco or Walmart, which can be quickly done. Choosing between financial institutions carries more weight because this institution will likely become their first contact for most life-changing events and is a place where one can entrust one's savings and livelihoods.

And with that trust, financial institutions have an immense influence on the lives of many, and their trust shouldn’t be mismanaged. If financial institutions cared about their customers, they wouldn’t sacrifice them to the credit card gods to make some fast cash while forcing their employees to hold the axe for a twenty-five-dollar gift card.