03 August 2006

Banking & the Plastic

Reading 2 Aug 2006s edition news from home country online this morning, I couldnt help but smile as it was reported that the biggest local banking group is up to its tricks again, this time by implementing a service charge for over-the-counter counter (OTC) withdrawals below an amount that is more than double my net salary. The report mentioned that this might be a move by the bank to generate more income. It was also noted that previous year, the same bank tried to impose a service charge for online banking services only to embarrassingly backtrack after a public uproar.

The bank promptly clarified via a statement (available at their website by the time I accessed it at night in London) that the OTC withdrawal charge is applicable to a selected few account types & that a fair majority of its customers will not be levied the charge for OTC withdrawal (hence not a money making move). Its said the move is to promote use of its automated teller machines (ATM) or as Barclays Bank terms it, Hole in the Wall, where an account holder may withdraw a maximum of that amount in question daily. This apparently was in line with their strategy to enhance efficiency & that the bank has invested much into it & other self service machines. My only gripe about this issue is that, based on past experience, the ATMs are frequently out of service for either some software/network error or the ATM has plainly run out of cash faster than its being resupplied. I pray that in anticipation of this move, the bank has taken steps to overcome such problems over the past year.

On the issue of banks generating income via penalties, fees & charges (PFC), its hardly surprising as competition has driven down interest rates chargeable on loans & overdrafts. I used to join the chorus of people complaining on the PFC of banks in home country. However, recent experience from inquiring of fees & charges applied by UK banks & from reading London newspapers, Ive come to appreciate that nominally i.e. we dont consider exchange rate effect, the banks in home country actually charge less for many of these PFC such as remittance fees & late payment charge for credit cards. Nevertheless, the UK banks currently dont charge any annual fees for current accounts & ATM card facility. It should be noted though that as a result of the EU Regulator forcing UK banks to reduce the credit card late payment charge from GBP50 to a max of GBP12 (home country banks charge RM5), a bank has already plan to start imposing annual fees for its current account facility to make up for the lost of income. Should this bank actually begins the practice, it is expected that other banks will follow suit & signals the end of free current account services in UK. Talk about profiting from other peoples mistakes & errors, eh.

This day too enhanced my satisfaction of the service provided by a foreign bank in home country. Just before coming to London, I got myself a pair of credit cards from this bank. It wasnt an intentional thing & it came about when I decided to listen to a sales person promoting the credit card at a shopping complex that I stop by on the way home from work 1 day. The guy offered me a credit limit higher than what I have from my other cards then. Mind you, I wasnt really bothered as from past years, Ive never maxed the credit limit of any of my cards. However, at that time, I had nearly maxed out my credit limits on academic related expenditure & the idea of having some more credits sounded appealing. Despite telling the sales guy I am not fond of credit cards with annual fees, I applied for a card (surprisingly, 2 came i.e. a Visa & a Mastercard, wonder if its a common practice among banks as its the 2nd time that happened to me) after he told me that no fees charged for the 1st year & I can cancel it without any penalty to me nor him. It has been a year since.

I called up that bank in the morning to clarify on their credit card cancelling procedure as well as to find out if I can get an annual fees waiver. Since the cards are only into their 2nd year, I was only offered a 50% annual fee waiver for which I had to pay for 2 straight years in advance aka pay 2nd year annual fees & get a waiver for the 3rd year aka 2-for-1. Hmm, after briefly considering, I told the lady that I will maintain a card & cancel the other that Ive never used over the past year. I chose to continue keeping the card for another 2 years as this bank has provided me with good service & was helpful to my needs throughout my stay here in London. Whereas, the other local banks whom I have credit cards with were less obliging to my whims & fancy. For the good service, I am willing to pay a bit & besides, the extra credit limit may come in handy within the next year or so for any big event in my life. I was even more impressed when the lady told me that I need not write a letter to the bank to request the credit card cancellation. The telephone conversation was adequate for her to process the cancellation. Wow, the last 2 banks whose credit cards I wanted to cancel required me write letter to that effect. If you are curious, 1 of those banks that required me to do so is the biggest local banking group.

On a closing note, I have been spending quite a bit on food supply for the past 6 days, mainly on fruits. I seem to be on a binge on cherries, grapes & bananas. Hmm, gotta watch my budget.

Till later, live long & prosper.

1 comment:

  1. told you that our banks are leaches! Parasites! Cheaters! They don't give a damn about the people! Just want to bluff and cheat their way so that they can get profits! BNM should start regulating things!