Stay true to your partner, but not your bank

Loyalty is an admirable virtue, but it can sometimes backfire, as Harvey Jones discovers...

A friend of mine recently rounded off a lengthy diatribe about her astonishingly annoying husband with the words:

"The trouble is that he doesn't want to divorce me, and I can't afford to divorce him."

Once we had finished laughing, we realised her joke (I think it was a joke) had a brutal truth to it.

Divorce is expensive. Just ask John Cleese. It has just cost him £12 million.

Even the average civilian divorce costs £28,000. You have to really, really want to break up to accept that price tag.

In the red

Despite the cost, growing numbers are now collecting not one but two or even three divorces.

One in five people separating in 2007 were previously divorced, compared to one in 10 in 1980.

A multiple marriage pile-up is even more expensive. The over-45s are in the worst financial state of any age group, according to accountancy firm Wilkins Kennedy, and one of the reasons is that they have more broken marriages in their debit column.

Setting up a second home for your ex, and paying maintenance and legal fees, can blow an irreparable hole in your finances.

Falling house prices have made breaking up even tougher, because couples now have less equity to divvy up.

So as my friend was honest enough to admit, marital loyalty at least brings financial rewards.

Smooth-talking bankers

But when it comes to financial services, it is the other way around. Loyalty can cost you dear, especially when you are dealing with the banks.

Banks are like unfaithful lovers. They woo you with 1.5% introductory bonuses on savings accounts and 12-month interest-free balance transfers on credit cards, the financial services equivalent of champagne and flowers. "We're not like the other banks," they whisper.

You know they're lying, but you just can't resist. But once they have won your favours, they cruelly dump you onto a 0.1% savings rate or 17.9% APR, the equivalent of flat beer and kebabs.

They do it again and again, then have the nerve to call their customers rate tarts.

This time it's different

Lloyds TSB's Easy Saver account, for example, has got the seduction process down to a fine art. It is all first date and no follow up.

After you have been seduced by its introductory 1.5% bonus, you wake up to discover the long-term rate is a loveless 0.1%. Sign up to this (as if you would) and you're going to hate yourself in the morning.

That is only the first savings account I stumbled across, there are dozens of similar accounts out there.

I'm too sexy for my APR

Just as there are dozens of credit cards charming you with sexy 0% introductory purchase and balance transfer rates, but you wouldn't want to settle down, get married and have kids with them.

It's the same with mortgages, where lenders entice you with their charming two or three-year fixes, then take you for granted on their standard variable rate.

Yes, I know SVRs are among the best deals on the market right now, but that's a quirk of the credit crunch, rather than the banks mending their ways.

They are still bad boys at heart.

Time to settle down?

Of course you can play the banks at their own game, and hop from one introductory rate to another.

It can be fun for a time, and you can tell yourself you're happy and fulfilled, although you might end up secretly despising yourself as a rate tart.

Why can't you settle down with a nice, reliable long-term savings or mortgage rate, you sigh?

I'll tell you why.

There is no Mister Right

The banks know you're weak. They know that at heart, you're a floozy.

You may think you want a modest but reliable savings rate, or a loyal and caring 10-year fixed-rate mortgage, but when the time comes to commit, you can't do it. You keep falling for that fancy bonus or flirty APR instead.

So put on a bit of slap, and start playing the market. Do it to the banks before they do it to you.

As my friend discovered, loyalty is for lovers - not banking customers.

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