In the Beginning, there was #Smallenfreuden
Once upon a time – or about six months ago – there were ten rich, middle-aged, overweight white guys sitting in a posh board room on the eighty-second floor of a designer skyscraper in San Francisco. These were no ordinary rich, middle-aged, overweight white guys (RMAOWG), they were special. They were special because they had elite marketing powers and worked for an incredibly rich mega-corporation that specialized in making money.
They decided they wanted people to buy stuff but they weren’t sure how to get people to do what they wanted them too. Mr. RMAOWG #1 had a great idea and turned to Mr. RMAOWG #2 and said, “Hey, we should make up a word and then put it on the Twitter so young impressionable minds will twit about it.” Other RMAOWG gets super-excited, “You are like that weird holiday where people give each other free stuff in person form, Mr. RMAWG #1! We are going to make squintillions! Moo hahah.”
And then…
The Result: #Smallenfreuden is Inflicted on the World
Around the beginning of May, people began seeing these billboards about #smallenfreuden. With no branding, tagline, or “call to action”, it had all the beginnings of a viral campaign. People became curious, searched the hashtag on Twitter, and tried to learn more about it. At first, there was no information available about who was behind the campaign – just an anonymous Twitter account asking viewers who they “smallenfreuden” with or how they “smallenfreuden”.
In a Toronto Star article, the reporter references a Youtube video which reveals the meaning of “smallenfreuden” as the “joy of small” and that the word originated in Greenwood, BC. The video attracted more than half a million views. As far as teaser campaigns go, it was becoming quite successful.
Visa revealed itself as the company behind the advertising campaign during the NHL playoffs with commercials. The premise is that you will earn rewards and/or cash back on the little purchases you credit. They “joy in small purchases”.
The multinational financial corporation tapped into the power of creating a social movement, paying a tonne of money putting up hundreds of billboard advertisements, launching Twitter campaigns, producing and posting Youtube videos, and buying up prime television commercial slots. In a Globe and Mail article, it was revealed that Visa even paid NHL announcers on TSN and CBC to use the term “smallenfreuden” to describe certain types of hockey plays in the play-offs.
Let’s look at this another way, here’s what #smallenfreudening looks like according to the mega-corporation Visa:
But here’s what it’s probably going to look like in the real:
#Smallenfreuden is nothing more than a money-making machine designed to hook you into the habit of using your credit card for everything. A bid to turn your credit card into something that you can’t leave the house without. Like a cell phone or house keys. An every day thing. A routine.
Transforming your credit card use from buying airline tickets and big purchases to gas, groceries, movies, snacks, coffees, fast food, pack of gum, effing eff word everything.
There’s been a lot of buzz in personal finance blogging community about #smallenfreuden. Some of the highlights for using your Visa for everyday purchases include: rewards/cash back incentives for vacations and other posh free stuff; buyer protection on anything that suddenly breaks or is defective; and keeping all your expenses on one statement so it’s easier to track. Most of these articles also caution against racking up charges you can’t pay off at the end of the month.
To be fair, these are all very valid points. I can see the logic in why this would be a good strategy for financially saavy people who know their limits.
I know I’m not particularly worried about these particular bloggers falling into the trap of amassing piles of debts and declaring bankruptcy as a result of this dumb #smallenfreuden campaign. They are probably wise and fearless enough to avoid that whole mess.
However, I feel like I’m taking crazy pills because I’m looking around and wondering if I’m the only one that sees some problems with this lemmings-over-the-cliff idea. This is definitely not a one-size-fits-all credit card strategy and sure as hell isn’t for the beginner consumer.
I’m not talking about never using your card or never having fun, but do we actually always need one for the other?
What I’m more worried about is the little eighteen year old with their very first credit card falling prey to crappy Visa and their manufactured “it’s cool and hip because it has a hashtag” campaign.
A less sophisticated consumer, like a younger person, may be talked into using their credit cards for these reasons without the benefit of knowing when to apply the “financial brakes” on spending – like these PF bloggers most likely would.
Little eighteen year old buys like crazy and is sunk in debt before they even reach legal age in most states. Who can say they didn’t think they were ten feet tall and bullet proof at that age?
Now it can be argued that it’s up to the cardholder to be aware of their financial situation and use their card responsibly. They also said that about smokers when Tobacco companies were targeting teenagers to get them hooked early. As I recall – that shit’s illegal now.
Disclaimer for my #Smallenfreuden Hate
Okay, okay. I realize I’m being preachy. All I’m missing is a burning bush, a couple of stone tablets and a sermon on the mount.
I realize I am generally a hateful creature. I am squinty-eyed and suspicious of new things and I respond poorly to surprises. When I think about new experiences, I see potential for woe and despair everywhere I go. Think ten plagues of Egypt.
Here’s an example of me below:
Back to #Smallenfreuden
But I digress, my point is that #smallenfreuden wants to f*ck you up. You and your huge credit card balance. Visa does not care about what’s cool or not cool unless it makes them money. The next time you think #smallenfreuden is cool and hip, think of the Bobs (from Office Space) as the advertising guys that are deciding what you should think is awesome:
Thus concludes rant of bitterness and vitriol.
Sunshine and rainbows everyone!
*Images used under a Creative Commons Licence (Sermon on the Mount painting & David Berkowitz image)
*All other images credited with author permission, purchased legally, or used under the Parody and Fair Use (Section 107) clauses of the Copyright act.
Every time I see a clever advertising campaign I picture a bunch of slimy dudes ala Mad Men. 🙂 I do have to give them credit though! For me I’ve learned to “swipe my card” on big purchases (but way less often) as a way to earn miles on southwest. I haven’t yet graduated to using it for small things to earn rewards points, but at some point I might…it just takes more “accounting” on my end and I’m not there yet. But..as someone who has learned a lot of control, I can get to that point…think of so many others who just swipe away and then never pay their balance until once day they open their bill. OH I’ve been there.
It’s true, everyone is at a different place with how they use their credit card. I think what bothers me about #smallenfreuden is that people absorb this concept without even thinking about it. Because it’s clever and witty.
People can end up adapting different behaviours based on very little examination because it seems easy/shiny. Before you know it, you’re up to your ears in debt because some ad exec put together a perfect recipe for something that seemed cool.
Great post! I feel the same way!!!
Everyone talks about their reward points like they’re gold….little do they realize that the merchants pay for these perks that customers get for using the cards….not the credit card company’s.
Every time we swipe plastic payment, the merchant pays a fee depending on the type of card you have. That fee is roughly 3 to 4. something % and guess where those fee’s go from there. To you,the consumer whether your paying cash or using your pretty plastic credit card.
So, who is really benefiting from #Smallenfreuden? Have you ever wondered why the bank buildings and offices are way bigger than our homes or business’s we work for?
#Smallenfreuden, what a waste!
Yeah, I read a lot about how #smallenfreuden will affect smaller businesses – not cool at all.
I think one of the biggest problems with #smallenfreuden for me is that it’s fake cool. It’s been manufactured through careful analysis, focus groups, and background research to construct a “social movement”.
And I don’t like what’s it’s asking people to do – not okay.
Thanks for stopping by CJ
Reward points are their marketing strategy to get you to spend more. Be aware and make use of your credit card only when you need to purchase something.
Yes, there is definitely a smart way of using your credit card and getting your bonus points. However these cards usually have higher interest rates and an annual fee that makes it not a user friendly if you do carry a balance ever.
The credit card companies know the pros and cons of bonus point programs and they’re quick to cut the program down if they’re not making enough money.
I completely agree and totally hate VISA for doing this. Another angle is the retailers who are faced with these additional charges as well because someone decides to pay for their $3 latte with a credit card. Guess who that cost is being passed on to?
Visa sucks for doing this. They’re big enough to push the issue if smaller businesses complain about it. They end up making tonnes of money and changing the face of the way customers buy their goods on a day to day basis.
The businesses will end up passing the costs down to us the customers and the $5.00 latte factor becomes the $7.00 latte factor. Everything goes up and the only people that don’t win are the smaller businesses and lowly customers.
It’s an incredibly effective campaign by Visa and we are Pavlov’s dogs. 🙂 While I do put the majority of my purchases on my credit card, it’s not because I #smallenfrueden. And you are right, the most vulnerable group, 18-24 years old, are the group they are targeting. The group who is probably less inclined to pay off their bill in full, every month. Who are mindlessly spending and do not track their purchases or budget. So that $5 latte is no longer $5, and many won’t realize it until they #smallfrueden themselves into substantial credit card debt.
Yup, I think it’s kind of unethical but where do you draw the line in advertising?
Yikes I must be out of the loop – I missed this entire advertising campaign! Definitely a clever campaign and kudos for them for thinking of it. It does seem a bit risky but it clearly paid off.
Well, there’s a lot of reasons why I think it paid off – some of them good and some of them not good.
I’m just wondering if it’s clever for all of us to buy into their clever campaign. Bonus points are great but there’s some compromises we can end up making without thinking it through that might not serve us as well in the long run.
Man who is that ridiculous PF blogger who uses her VISA for $5 Starbucks or $3 Menchie’s Fro-Yo? 😛
I recieved many emails from that post that using credit card is pricey for small businesses and I guess it’s something I don’t really think about because I work in downtown Vancouver so I don’t really get the opportunity to shop at these tiny shops. Out of sight, out of mind kinda thing but I’m glad readers brought it to my attention.
Obviously me and you will agree to disagree on this topic but I do hope young people won’t choose to use their credit card in an irresponsible manner. Like anything in life, moderation is key!
Oh GMD – I don’t think you’re ridiculous to use your credit card in this way.
I wanted to point out that while I believe it would work for you and ‘Fun, Fabulous, and Frugal’ (the other blogger I quoted), it definitely would not be a great idea for a lot of people just learning how to use their credit card.
I count those ‘learning’ to be those who are new credit card owners and people who might have had trouble with credit in the past and didn’t feel confident in their use (namely me).
It is a good idea for you because that what works for you – and I don’t disagree with that. I think where you and I might disagree is the #smallenfreuden campaign itself.
I don’t like it because it targets young people and tries to suck them into using their credit card in a fairly thoughtless way while trying to make it sounds “convenient”. I generally give most media campaigns the stink eye because I think they’re selling us stuff that can’t be bought.
You like it – from what I can pick up from your article – because it’s fun, hip, and promotes a way for you to multitask and earn points/track expenses/have buyer protection if you need it.
I quoted you because it helped me make a point about our need to deconstruct what’s being blared at us 24/7 with adverts and such.
So, in summary,
GMD strategy: Awesome
GMD love of #Smallenfreuden: Agree to disagree
Hmmm…you know, now that I think about it – I might have broken my own promise in my ‘Don’t be an A$$hole’ Manifesto.
GMD, I think by quoting your article, I unfairly singled you out in a not-cool way. I am sorry for that – sometimes I get carried away with making my point and bystanders get drawn into the fiery explosion and get hurt.
I know what I wanted to achieve with the quote but that doesn’t seem to be how it comes across. I’ll re-edit the article and make my point a different way. You deserve better.
Hilarious.
Yes, Jesus does rock the halo. Now all I’m going to think about is #Smallenfreuden all day….
I think it’s okay for people that can pay off their bill every month, but it’s definitely awful for those who can’t. Worse (because I was dumb enough to do it back in the day!), small expenses are often underestimated or even forgotten, that it becomes quite the sticker shock when you get the bill.
Yes, I made the same mistakes you mentioned with a credit card. Charge away until you can’t charge anymore! I had crappy credit before I even finished university – how dumb is that?
I dont understand what the issue is. There are people that like to pay full prize, there are people that like discounts. personally, I like to minimize what I pay and like to maximize what I get. Paying with my Visa I don’t get charged $1.50 per transaction (the way I do when I pay with Interact) and with the points that I accumulate at the end of the year I get cash back that is free money. If I paid in cash or with debit I wouldn’t get a discount, so can please someone explain to my why is a good idea to pay $1.50 per transaction and leave money on the table?
Granted, this only works if I pay my credit card balance in full and that is what I do. I have never ever paid a cent in interest to Visa. If I need money I use my 3% line of credit.
Andrew
Hi Andrew
I actually think you hit the nail on the head as to what the issue is – you mention yourself that you pay off your balance every month and collect rewards.
I was trying to show that #smallenfreuden is targeted towards younger people who are newer credit card users and might not pay off their balances every month. Rewards cards generally have higher interest rates and are more likely to have annual fees so carrying a balance can be very detrimental to someones financial health.
It sounds like you’ve structured your financial life so that using your Visa for all your purchases is a smart decision. It sounds like you have a very basic bank account that charges you per transaction and a line of credit with a good interest rate. So it’s going to make more sense for you to use your Visa and your line of credit instead of a debit card and a cash emergency fund.
Using your Visa can be a very good plan. #Smallenfreuden has nothing to do with a good plan, though, and everything to do with racking up your debt with latte purchases and paying higher interest for months. That’s how they make money and that’s why I have the issue.
Thanks for your response Lindsey.
What I don’t understand is why if your website is about getting the most out of your personal finance you are not advocating to use reward credit cards for all expenses and always pay balances in full.
Hey Andrew
Thanks for disagreeing with me. I know that sounds weird but I love that people care enough to be like “hey Lindsey, you’re full of crap and here’s why…” It’s not a discussion if everyone is like “Hooray, you’re the best ever all the time.” (Especially when I’m not)
So to answer your question:
Yes, my website is dedicated to getting the most out of personal finance but my critique of #smallenfreuden is twofold:
1. One of my goals is to provide an alternative perspective or critique of advertising campaigns out there that get people to buy into certain things. I’m a fan of media literacy and the purpose of targeting Visa was to get people to think critically about whether it’s really cool and hip or if Visa is just manufacturing hype to get people using their credit cards. I believe people need to be able to think independently in such a consumer culture and then make an informed decision. If you choose to buy into #smallenfreuden and think it’s cool after you know what’s going on behind the curtain, that’s fine.
2. I say a couple times in my article that there are some very persuasive reasons for using your credit card for purchases large and small – bonus/rewards points being one of them. But to be kind of gross, there’s more than one way to skin a cat. You don’t have to use your credit card to participate in bonus/rewards programs, there’s lots of other options out there that don’t involve swiping your Visa. It might not be as easy to rack up points but I think people should have options. So, in summary, I’m not against using your credit card for rewards points but I think there’s lots of other ways that can be highlighted as well.