TV ads urge credit card use for even small purchases

Visa Canada wants you to use your credit card for small purchases, while Desjardins gives insurance discounts based on your driving patterns.

A Visa ad campaign wants you to use your card for small purchases.

By: Ellen Roseman On Your Side, Published on Sun Jun 02 2013

Do you Smallenfreuden?

Take control with Ajusto.

Two advertising campaigns, built around a made-up word, have unfolded in the past few weeks.

Both were hard to miss for those watching the National Hockey League playoffs on CBC Television or the CTV national news at 11 p.m.

Both started as teaser campaigns, not revealing key details. I found myself attentive and annoyed, puzzling over their meaning.

Did smallenfreuden have anything to do with the German word “schadenfreude,” which means taking delight in other people’s woes?

How would Ajusto help us take control? Was it a new type of laxative?

Visa Canada was the first to unveil the corporate brand behind the campaign, which also took place on Twitter.

It said smallenfreuden was an English/German portmanteau (a word formed by merging the sounds and meanings of two different words), which meant “the joy of small.”

The campaign is designed to encourage you to use your credit card for the small purchases you’d make anyway — and earn reward points, cash rebates or other card-related benefits.

While I love the commercials, I’m troubled to see Visa pushing consumers to use more credit, especially when household debt is at record levels.

When I asked about the ethics of this campaign, I got a polite brush-off.

“We are unable to facilitate an interview,” said Visa Canada spokesman Perry Ge, urging me to check the Canadian Bankers Association’s website for credit card usage information.

Canadians receive great value when they use their credit cards for purchases, said Brenda Woods, Visa’s head of marketing, in a prepared statement.

They get to consolidate spending on one bill. They get a grace period before paying their bill at the end of the month. And they get fraud protection under Visa’s zero liability policy.

“Research shows the majority of Canadians pay their credit card balance in full each month, smartly using their cards as a tool to track spending and make purchases without having to carry cash,” Woods said.

Using a debit card for purchases also provides a tool to track spending and avoid carrying cash. However, Visa prefers you to use your credit card for small transactions, since it makes more money that way.

Meanwhile, Desjardins Insurance is behind the Ajusto ads. It hopes you will install an electronic device in your car that will transmit data to the company on your driving patterns.

“The device plugs into the diagnostic port of cars that are 1998 or younger,” says Desjardins spokesman Joe Daly, who’s keen to dish the details.

“Using the Bell network, the device monitors three things: How much driving you do, when you drive and how you accelerate and brake.”

Usage based insurance, as it’s called, is a popular plan in the United States (where eight of the top 10 insurers use it) and in Europe.

Desjardins is giving discounts of up to 25 per cent a year to customers whose on-board devices show they drive less than 15,000 kilometres a year, avoid rush hour and after midnight traffic, and accelerate and stop smoothly.

Customers can check their online dashboards, which are updated every day, to see how they’re driving. And even better, parents can monitor the driving of their teenage children.

Desjardins says it’s the first company to offer usage-based insurance on a widespread basis in Ontario and Quebec. It had to get approval from the financial regulators.

“Privacy is a huge issue,” says Daly. “We’re not using the driving data to penalize motorists and we’re not sharing it with anyone.”

Ajusto isn’t acting as a Big Brother device, Ontario’s Privacy Commissioner Ann Cavoukian said in a news release. By opting in to a voluntary program, consumers can exercise control over the data they provide to the insurer.

I think Desjardins has found a winning formula, which combines savings with a subtle pressure to improve driving patterns. I’m sure other insurers will follow suit.

My only beef is with the TV ads, split into 15-second segments that occur in close succession. Repetition isn’t always a good thing.

Free seminar: I'm doing a free workshop, called Financial Basics, on Tuesday, June 18, from 5.30 p.m. to 9.30 p.m., at Ryerson University's Chang School, 297 Victoria St., 7th floor. Advance registration is not required.

Ellen Roseman writes about personal finance and consumer issues. You can reach her at eroseman@thestar.ca orwww.ellenroseman.com