How to avoid excessive bank charges
Johannesburg - Every year Finweek and Bruce Whitfield ruffle South Africa’s bank managers’ feathers with an in-depth review of bank charges.
Readers and those who use banking services (including myself) then go stomping and raging for a few weeks about the injustice of it all but don’t, in the end, do anything practical about it.
Over the past couple of months I’ve noticed two charges on my bank statement that have ruffled my feathers somewhat.
To draw cash from my bank’s own ATM (that’s FNB), now costs R11/transaction. I’m sure it was less in the past.
But the second charge – which is actually more of a pain – is the R13.25 it now costs me every month for my R70 stop orders to third parties.
A visit to the bank or reading carefully through the conditions of the charges as set out on the bank’s website is quite an eye-opener.
Let’s start with the R11 for drawing cash at my bank’s own ATM. For many years I always just drew R500 a time. But recently I’ve noticed the option of drawing R500 has been replaced by an automatic option of R600.
So if you now want to draw R500 you have to enter that specifically as an “other amount”. Of course, the alternative of simply clicking on R600 is much simpler.
But I didn’t know – nor does the ATM tell you – the charge for withdrawing R500 is R5,50 while the charge is nicely doubled to R11 if I choose the more convenient one-click option of R600. Sneaky, FNB, sneaky!
My message – and I hope thousands follow it – is simply to enter R500 again in future rather than using the more convenient R600.
By the way, as an FNB client and shareholder in FirstRand let me say you’ve earned yourselves a big minus for that little trick to earn more commission.
The second part of bank charges that really get my goat is the service providers who insist on a debit order on your bank account or credit card.
If I could rather push the money to you (by electronic payment) the cost would only be R7.20/transaction.
In short, if I could push money to service providers every month – rather than giving them the right to draw from my account – I’d save more than R30/month.
Rather than drawing R600 four times a month I’m now back at my R500 a time. That’s another R22/month in bank charges.
So in total it would be more than R50 – just enough for an extra bottle of reasonably good red wine.
Those are just a few of the little costs that sneak quietly into our daily expenses.
There are two golden rules here: the bank isn’t going to tell you or warn you how you can save. Forget that. You have to find out for yourself what its bank charges involve and then do something about it.
The second, which is cardinal business practice for me, is: tear up your chequebook. If there’s any dealer or service provider who still insists on a cheque – and then it’s a bank-guaranteed cheque – get rid of him.
Don’t allow anyone to draw money from your account with a cheque or even a debit order. Be sure to push your money. For the recipient of the money, the payment is safer, quicker and cleaner even than a bank-guaranteed cheque, because those have also been forged in the past.
If your IT knowledge or financial practice is such that money can’t be pushed to you and you still have to draw, it’s time you learned and adapted – otherwise you’ll lose business.
A last piece of advice: the only way I can justify the R780/year charge on my platinum credit card and the two linked fuel cards is to use them as often as possible for everything I can.
For a start, we earn a few more eBucks every year in real rand value of more than R780. The extra bonus now of more eBucks after buying fuel (the so-called 15%) also helps justify the ego-stroking platinum card.
Please use your platinum card to pay toll road charges. There are no transaction charges, even if the toll charges are as little as R7/trip (at the Zambezi off-ramp).
It’s much quicker than cash and it won’t frustrate the other motorists behind you.
* This article was first published in Finweek.
Readers and those who use banking services (including myself) then go stomping and raging for a few weeks about the injustice of it all but don’t, in the end, do anything practical about it.
Over the past couple of months I’ve noticed two charges on my bank statement that have ruffled my feathers somewhat.
To draw cash from my bank’s own ATM (that’s FNB), now costs R11/transaction. I’m sure it was less in the past.
But the second charge – which is actually more of a pain – is the R13.25 it now costs me every month for my R70 stop orders to third parties.
A visit to the bank or reading carefully through the conditions of the charges as set out on the bank’s website is quite an eye-opener.
Let’s start with the R11 for drawing cash at my bank’s own ATM. For many years I always just drew R500 a time. But recently I’ve noticed the option of drawing R500 has been replaced by an automatic option of R600.
So if you now want to draw R500 you have to enter that specifically as an “other amount”. Of course, the alternative of simply clicking on R600 is much simpler.
But I didn’t know – nor does the ATM tell you – the charge for withdrawing R500 is R5,50 while the charge is nicely doubled to R11 if I choose the more convenient one-click option of R600. Sneaky, FNB, sneaky!
My message – and I hope thousands follow it – is simply to enter R500 again in future rather than using the more convenient R600.
By the way, as an FNB client and shareholder in FirstRand let me say you’ve earned yourselves a big minus for that little trick to earn more commission.
The second part of bank charges that really get my goat is the service providers who insist on a debit order on your bank account or credit card.
If I could rather push the money to you (by electronic payment) the cost would only be R7.20/transaction.
In short, if I could push money to service providers every month – rather than giving them the right to draw from my account – I’d save more than R30/month.
Rather than drawing R600 four times a month I’m now back at my R500 a time. That’s another R22/month in bank charges.
So in total it would be more than R50 – just enough for an extra bottle of reasonably good red wine.
Those are just a few of the little costs that sneak quietly into our daily expenses.
There are two golden rules here: the bank isn’t going to tell you or warn you how you can save. Forget that. You have to find out for yourself what its bank charges involve and then do something about it.
The second, which is cardinal business practice for me, is: tear up your chequebook. If there’s any dealer or service provider who still insists on a cheque – and then it’s a bank-guaranteed cheque – get rid of him.
Don’t allow anyone to draw money from your account with a cheque or even a debit order. Be sure to push your money. For the recipient of the money, the payment is safer, quicker and cleaner even than a bank-guaranteed cheque, because those have also been forged in the past.
If your IT knowledge or financial practice is such that money can’t be pushed to you and you still have to draw, it’s time you learned and adapted – otherwise you’ll lose business.
A last piece of advice: the only way I can justify the R780/year charge on my platinum credit card and the two linked fuel cards is to use them as often as possible for everything I can.
For a start, we earn a few more eBucks every year in real rand value of more than R780. The extra bonus now of more eBucks after buying fuel (the so-called 15%) also helps justify the ego-stroking platinum card.
Please use your platinum card to pay toll road charges. There are no transaction charges, even if the toll charges are as little as R7/trip (at the Zambezi off-ramp).
It’s much quicker than cash and it won’t frustrate the other motorists behind you.
* This article was first published in Finweek.
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