invest 29
October 26, 2014 thesundaytimes
Banks improve
transparency of
credit card charges
INSIDE INVEST
Better readability, fees
itemised in one sheet
instead of being
buried in fine print
Marissa Lee
ST PHOTO: RUDY WONG
Senior director Nick Hawkins learnt about the value of money at a young age from his parents. A former
Briton, he has been in Singapore for about 10 years and became a citizen 18 months ago.
DON’T GET
EMOTIONAL
DAD STILL
KNOWS BEST
IT PAYS TO
GET INSURED
Beware the pitfalls of getting
too emotional when you
invest your money, writes
Goh Eng Yeow, but most
importantly, have fun.
See >>Page 32
Senior director Nick Hawkins
got financial advice from his
dad in his early years and still
does, via video link from UK.
See >>Pages 34&35
Paying for travel insurance is
worth it for peace of mind on
that overseas trip, says Cheryl
Ong.
See >>Page 37
Like what you have read? E-mail [email protected]
with your feedback and suggestions.
Moves by banks to improve transparency means customers will be
less likely to be hit by those dreaded “hidden” fees that tend to creep
into monthly credit card statements.
United Overseas Bank (UOB)
started the ball rolling in May,
when it included a table outlining
the various fees cardholders can
expect. These details are included on card application
forms, online and on the
back of card statements.
“All the information had always been
available, but in May we
consolidated it into a reader-friendly format that is easy to
read at a glance,” said a UOB spokesman.
DBS Bank took a similar tack in
June, when it consolidated the fee
structure information across its 12
different credit cards into a single
product highlight sheet.
“Before June, you had to go
through two or three different
agreements to see what the charges
for each card were. Now you can refer to one sheet,” said a bank
spokesman.
These are welcome changes, given that cardholders here typically
carry around five cards and have often been caught out when disputes
arise, as the onus is on consumers
to be more wary rather than for
banks to be more forthcoming with
information.
All banks claim to offer product
highlight sheets, but the levels of
readability and clarity differ widely.
This is despite an industry initiative
to promote greater fee transparen-
cy helmed by the Association of
Banks in Singapore (ABS), a
non-profit that represents the interests of the commercial and investment banking community.
ABS and its member banks
agreed late last year “to extract and
tabulate the key terms and conditions (of credit cards) in a standardised format, via a product highlight
sheet”, the association told The
Sunday Times in a statement.
“It was intended to be an easy
reference guide for credit card customers to ascertain the different
fees and interest charges with better clarity and transparency.”
The ABS also said that the meaContinued on >>Page 30
ST FILE PHOTO
Cardholders
have often
been caught
out in
disputes
over fees.
30
invest
thesundaytimes October 26, 2014
More
can be
done
to keep
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sures were implemented in August
but it did not comment on how successful they had been.
When The Sunday Times examined product highlight sheets from
five card-issuing banks, the samples
threw up a wide variance in format,
length of text and clarity.
For example, some banks still
use the term “finance charges” to refer to interest charged and many
employ the term “dynamic currency conversion fee” without explanation. (See illustration.)
The Sunday Times understands
that the banks were not given specific requirements when compiling
their product highlight sheets.
The initiative is purely industry-driven, without the Monetary
Authority of Singapore (MAS) imposing any regulation on what format the end product must use.
Instead, the MAS’ focus has been
on reducing the occurrence of fee
disputes through consumer education.
Mr Seah Seng Choon, executive
director of the Consumers Association of Singapore, backed a standardised product highlight sheet but
felt it could be even more simplified: “Terms like ‘dynamic currency
conversion fee’ are ambiguous and
consumers are unlikely to understand.
“We would like to stress that financial terms should be written in
layman’s language and not in financial jargon.”
[email protected]
IF''B!+6: )?8
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Is CFD trading suitable for all retail investors? Or
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Stephen Innes, a Senior Trader at OANDA Asia Pacific
techniques you have been using in other forms of trading
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What are the pitfalls of CFDs that retail investors
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investing: keep it simple, avoid fees, and never buy
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As with all forms of investing, there are risks involved.
Anyone who decides to actively participate in financial
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To that end, education is essential to investing wisely in
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Many believe CFD trading requires a short-term trading
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Preserving your capital should always be priority No. 1.
Generally speaking, whatever risk management tools and
Here’s what a typical credit card product highlight sheet looks like.
The Sunday Times explains seven common fees and charges that
card users should pay attention to.
■ If your payment
is late or you do
not pay it in full,
you will be charged
interest on your
current purchases
as well as on all
subsequent
purchases.
■ For cash
advances, interest
is charged from the
date the
withdrawal takes
place.
From >>Page 29
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Seven not-so-hidden fees
In less than 50 words, what is your Unique Selling
Point in trading CFDs?
As OANDA’s CFDs have no expiration dates, there is no
need to manage your positions when the asset reaches
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www.oanda.sg
This article is for general information purposes only and presented to you by OANDA Asia Pacific Pte Ltd. OANDA Asia Pacific
Pte Ltd (ACRA Reg. No.200704926K) is licensed by both the Monetary Authority of Singapore and International Enterprise
Singapore. Leveraged trading carries a high level of risk and may not be suitable for all investors. You could lose all of your deposited
funds. Opinions expressed are the author’s own. For more details, please see http://www.oanda.sg/legal/risk-warning.
All forms of trading and investment carry risk. Such activities may not be suitable for everyone.
■ This fee is
imposed if you fail
to pay at least the
minimum sum by
the payment due
date.
■ This is an annual
membership fee for
the use of your card.
■ Each bank lists
the rates for all its
credit cards here.
■ If you use your
credit card to
draw cash over
your credit limit,
you pay a fee.
■ This fee is in
addition to the
interest charged
on the amount
advanced (see
Finance
Charges on
Cash Advance
above).
■ If you make a purchase overseas or online and are
charged in a foreign currency, your card statement
should show one amount in foreign currency, and
one amount in Singapore dollars.
■ The exchange rates used for the conversion may
vary day to day and from bank to bank.
■ Your bank should explain how the conversion is
calculated in the terms and conditions section for
your card.
■ You can also find out from there if any other
administrative charges factor into the final Singapore
dollar amount that is reflected in your statement.
■ Some overseas merchants may list their
prices in Singapore dollars or offer to
convert your foreign currency transactions
into Singapore dollars. This is a service
known as dynamic currency conversion.
■ The exchange rates used here are
determined by the merchants and their
payment processors.
■ On top of the price given, you will be
charged a fee by your card company
(e.g. MasterCard and Visa) for the
conversion service.
ST GRAPHICS