Personal Finance | Banks charge to avoid ‘embarrassment’
Many of us have been in a situation where we’re out shopping and looking to pay using our bank card. You haven’t been keeping an eye on your card limit, but your card has not been declined, so you think all is well.
According to the National Credit Regulator, an honouring fee would not be permissible under the National Credit Act . As the act only came into effect in 2007, this could explain Standard Bank’s policy on only applying the fee to credit cards issued prior to this date.In response to a query from City Press, the bank said: “At Standard Bank, we aim to enable a frictionless transactional experience and strive to provide the best customer experience possible.
Standard Bank appears to be the only bank that charges for exceeding the limit on a credit card, although FNB and Absa charge a fee for honouring a transaction on a current account.Capitec said it allowed credit card users to go over their limit by a small amount, but it does not charge an additional fee for this service.
The bank said this only applies to credit card transactions and that it would not honour any transactions, such as a debit order, that exceed the balance on a current account.Nedbank does not allow transactions to exceed a credit limit, and said that, in compliance with NCA requirements, its policy is to “protect clients at all times”. As such, the bank “no longer permits transactions in the event of insufficient funds in accounts of individual customers.
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