Value Added Service fees… what charges are these?

Bank_charges

03/08/2018 Consumers have been up in arms on social media over bank charges. In particular, FNB clients can’t seem to understand why they have to pay so many different fees - the most popularly questioned pair being ‘Value Added Serv Fees’ and ‘Service Fees’.

To help you get a better idea of what exactly you are paying for, in this article we take a look at some of the most common fees banks typically charge. Knowing and understanding your bank charges can help you cut down on some banking habits that cost you more.

Monthly fee: This is the standard monthly administration fee for your account. It is not determined based on your banking behaviour and it only changes when the pricing of the bank changes.

Value Added Services fee: These are fees charged for ‘add-on’ services that do not form part of the core offering. They are merely for your convenience and include the purchase of prepaid products. Examples include payments to or purchases of or on iTunes, Multichoice, electricity, LOTTO/Powerball and traffic fines.

Service fee: Depending on your bank, these are the fees you incur once you exceed the allocated ‘free services’. For instance, if you get 5 free monthly withdrawals and end up doing a total of 15 instead, the additional 10 withdrawals have a certain fee that applies, which is then listed as a service fee. This also includes branch transactions and other transactions that are not free or discounted given you stay below a certain maximum.

Credit card account fee: This fees covers transacting and value added services associated
with your credit card.

Credit Facility service fee: This is a monthly fee charged for the administration of the credit facility. It is also sometimes bundled with the credit card account fees when marketed, so it can be a confusing component to see in your statement if you never read the pricing guide. Both the account fees and credit facility fee also only change when the bank increases their pricing overall.

Monthly rewards fee: This is a fixed fee that you pay in order to get access to the benefits and discounts offered by your bank through their rewards’ programme.

Declined transaction fee: A charge for unsuccessful/declined transactions due to insufficient funds in your account.

How you can save on bank charges:

  1. Avoid branch banks at all costs. Making deposits or withdrawals at a branch often costs an arm and a leg
  2. Always try to use your bank’s ATM to transact. Using other bank’s ATM can almost double the charge for each transaction.
  3. Use mobile and online banking as often as possible, it is usually cheaper and in some cases free
  4. Avoid unnecessary withdrawals. Most banks offer unlimited free swipes and swiping rewards. 
  5. Withdraw money from till points whenever you can. Using the ATM is more expensive.

READ: Why are my bank charges so high?

When it comes to bank charges, your bank’s Pricing Guide is your best friend. Make sure you understand what you can do for free or at a discounted charge and try to structure your transactions in such a way that you incur minimal charges. Remember to always check your bank statement to keep track of your charges and make sure you’re not overcharged.

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