This is the ‘worst’ bank in the world, according to Wall Street expert Vivian Tu

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Her choice will probably surprise you.

Some big banks definitely don’t have the best reputations. So when the topic of the world’s worst banks comes up, you may already have a name that comes to mind.

Whatever bank you’re thinking of, financial influencer Vivian Tu says you’re wrong. On her social media her channel Your Rich BFF, she recently revealed that the worst bank in the world is Starbucks. wait what? Yes, she’s talking about coffee giants, but here’s an interesting point.

Why Vivian Tu Calls Starbucks The World’s Worst Bank

Starbucks may not actually offer bank accounts, but they hold a lot of their customers’ money. Customers can choose to purchase a physical gift card or top up an electronic gift card using the “Scan & Pay” option in the Starbucks app.

Here’s the shocking part — Starbucks has about $1.6 billion outstanding in gift cards. This information is courtesy of the annual 10-K filing with the SEC.

This essentially means that Starbucks has borrowed $1.6 billion from customers at 0% interest. And we’re repaying that loan with coffee instead of cash.

Already a good deal for Starbucks, but even better. Some customers are unable to redeem gift card balances. So coffee his chain doesn’t even have to repay the full amount of the “loan”. For fiscal 2022, Starbucks reported $196 million of damage or unused gift card balances.

With numbers like these, it’s understandable why Tu calls Starbucks the worst bank in the world. It holds $1.6 billion, far more than many banks and credit unions manage. Also, you don’t have to pay interest. In fact, in many cases he can keep 10% or more of that money.

Do not bank on Starbucks

One of the reasons customers top up their Starbucks cards through the app is because they can earn more rewards this way. His normal Starbucks Rewards rate is 1 star per dollar, but he can earn 2 stars per dollar.

Even with this incentive, there is still no good reason to give Starbucks a loan. If you want to earn extra rewards, simply top up the money through the app right before you go to Starbucks and only top up the amount you need. If the regular order is $10, load $10. That way, you’ll earn two stars for every dollar you spend without leaving any unused funds on your Starbucks card.

Alternatively, you can scan your Starbucks Rewards membership at the time of purchase. You get one star for every dollar you spend, but it’s easier. No risk of leaving money on your Starbucks Card by forgetting to use it.

Whether or not Tu agrees with calling Starbucks a bank, she’s right about one thing. Starbucks is not a place to keep your money. Keep your cash in quality checking and savings accounts that earn interest and are always accessible.