CBA entices youth to borrow and spend
The Commonwealth Bank is marketing a new “Youth Personal Loan”, targeted at 18 to 24-year-olds who have steady incomes. The loan is for amounts up to $10,000, to be spent on consumption items like cars, furniture, clothes or travel.
The CBA is direct mailing a pre-screened group of 20,000 customers with good savings habits. The package includes a CD featuring a fictitious guru, Dr Gordon Spraybooth, who advocates the path to happiness through “money, cash, moolah”.
The loan is repayable within five years and has an interest rate of 11.2 per cent a year, subject to change.
The bank said it has a large student banking program in schools is trying to “deepen its relationship with youth customers”. The ANZ and National Australia Bank also offer student loans but promote them for studies or holidays, while Westpac targets students through on-campus promotions.