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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.
Then you get your bank statement and discover that, during your shopping spree, your credit card went slightly over the limit and the bank has hit you with a R145 “honouring fee”.
This is what happened to Standard Bank customer Nicolas, who wrote:
According to Standard Bank, its policy is to allow the transaction to go through to avoid potential embarrassment, and the fee is only charged to customers who opened their accounts before June 1 2007.
According to the National Credit Regulator, an honouring fee would not be permissible under the National Credit Act (NCA). 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.
STANDARD BANK
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.
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“We recognise that our customers might encounter situations when they need the ability to transact but do not have the necessary funds available in their accounts. In these situations, we allow our valued customers to exceed their available funds by a small margin, where there is potential reputational risk they could be exposed to if we do not honour their payment.”
An honouring fee is also charged on a transactional product such as a current account, but the bank says it introduced a cap of R100.
“We have also adjusted this fee downwards for lower value transactions where the value of the fee will not exceed the transaction value, which is in line with industry practice.”
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
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.
“This is to improve client experience when the card is used at a point of sale. In this case, the client must have a good credit profile and be in good standing on their other credit products.
“The amount used will then be collected with the client’s instalment on the next debit date. Capitec does not charge an honouring 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
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. [Therefore], honouring fees do not apply.”
FIRST NATIONAL BANK
FNB will also not allow a customer to exceed the limit on their credit card, but will honour certain transactions over the limit of a current account if the customer is in good standing. There is a time limit to replenish the funds before paying an honouring fee.
Sajeel Jagjivan, head of pricing at FNB personal core banking, says the bank “offers a value-added service that assists customers in real time when they have a liquidity shortfall”.
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This is linked to debit orders, card purchases and scheduled payments. It ensures that an insurance debit order is paid, for example, and allows the customer a point-of-sale transaction when purchasing groceries for their family.
The customer is then allowed one day to rectify their account by depositing additional funds before a fee is levied. For values less than R45, the fee is equal to the transaction value, while transactions of more than R45 are charged at R45 per R100, with a maximum fee of R200.
ABSA
Absa does not charge fees to customers who exceed their credit limits on credit cards or savings accounts, but a fee may apply on honouring a debit order on certain current accounts.
Jean van Rooyen, head of retail pricing at Absa everyday banking, says that fees only apply in exceptional circumstances where a debit order is honoured in excess of a customer’s available balance.
“A fee of R50 per transaction applies per item that is honoured, since this requires a manual intervention from one of our credit officials. This fee is only charged per month in arrears to offer a customer the opportunity to dispute the transaction that was honoured and, indeed, the honouring fee.”
