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Mar 4, 2010
EXCESSIVE CARD CHARGES
Banks do it too
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I REFER to Tuesday's letter by Mr Vincent Chan, 'Why impose hefty credit card surcharge?'
I wish to quote two examples of hefty charges, imposed by banks in Singapore:
Recently, I paid US$1,810 (S$2,540) to a factory in China. The bank charge amounting to US$53 was deducted from the payment. The factory in China, which had earlier agreed to bear the bank charge, complained that the charge was too high.
I received a letter from my bank stating that the administration fee for a late payment on my credit card is $50. This is in addition to the interest rate of 2 per cent per month it charges on the rollover balance.
In both cases, the bank charges are exorbitant relative to the marginal cost of the service provided.
As the banks are already making substantial profits from the interest spread, why are they allowed to make even more from these exorbitant charges?
After a customer has opened an account, it is difficult for him to change to another bank. In any case, nearly all banks seem to operate like a cartel in levying hefty charges to boost their profits.
Tan Kin Lian
EXCESSIVE CARD CHARGES
Banks do it too
<!-- by line --><!-- end by line -->
<!-- end left side bar --><!-- story content : start -->
I REFER to Tuesday's letter by Mr Vincent Chan, 'Why impose hefty credit card surcharge?'
I wish to quote two examples of hefty charges, imposed by banks in Singapore:
Recently, I paid US$1,810 (S$2,540) to a factory in China. The bank charge amounting to US$53 was deducted from the payment. The factory in China, which had earlier agreed to bear the bank charge, complained that the charge was too high.
I received a letter from my bank stating that the administration fee for a late payment on my credit card is $50. This is in addition to the interest rate of 2 per cent per month it charges on the rollover balance.
In both cases, the bank charges are exorbitant relative to the marginal cost of the service provided.
As the banks are already making substantial profits from the interest spread, why are they allowed to make even more from these exorbitant charges?
After a customer has opened an account, it is difficult for him to change to another bank. In any case, nearly all banks seem to operate like a cartel in levying hefty charges to boost their profits.
Tan Kin Lian
