How to Spend Your Way to Luxury

Luxury CarI recently received a letter that promotes a new Mercedes-Benz Visa Card. Since I’m a student of marketing (I write ads for a living), I set it aside so I could write about it on this blog.

Among the claims made in the letter, I am told the Mercedes-Benz Visa Card will “Accelerate your lifestyle.” I guess this statement is technically true. Any credit card, when used, will accelerate your lifestyle. You will steal money from your future to spend today. They don’t mention this in the ad.

Another claim: “Take it for a spin and earn your way into a Mercedes-Benz.” (The word “earn” is bolded in the letter.)

This one is kind of humorous. It seems the marketing folks have invented a new method of earning. No longer do I have to do something of value and save the money I earn to purchase a car. Now I can simply spend my way to luxury!

Hmmm… last time I checked, I become poorer when I spend money. And I become poorer still when I spend money with a credit card. If I’m getting richer, somehow I’ve missed it.

Yet this is the claim being made.

In this particular case, you don’t actually “earn” the car. You pay for it with hidden costs. Every time you make a purchase, the card charges the merchant a fee. Often 2.9% or thereabouts. This fee is then split between Visa and Mercedes-Benz. The more you spend, the more Visa and Mercedes-Benz make.

You only get the car once they’ve made more money from your spending than the cost of the car. They essentially give you a gift out of the profits they’ve made on your spending.

Of course, imagine how much you will have to spend to cover the cost of the Mercedes. Assuming it costs $35,000 (conservative), you would have to spend $1.2 million just to pay for the vehicle–not counting any profits for Visa or anybody else. (You earn one point for every dollar you spend with the card. 2.9% of $1.2 million equals $34,800.)

Incredible, isn’t it?

This is how we are being marketed to. We are being told that we can spend our way to wealth, and that this is an attainable goal. But never in history has a person become wealthy by spending money. Something to keep in mind.