MONTHLY ACCOUNT FEE vs CREDIT FACILITY FEE

the Mastercard and Visa network”.

The credit facility fee covers “the cost associated with the routine administration and maintenance of the credit facility”, he says.

The National Credit Act (NCA) regulates and limits the fees and interest that a credit provider may charge you, the consumer. The Act provides for the following fees: an initiation fee (to initiate a credit agreement), a monthly administration or service fee, interest, default administration charges, collection costs, and credit insurance.

The revised regulations under the Act state that a maximum service fee of R60 a month can be charged to cover “the cost of administering a credit agreement, which are the operational costs of the credit provider such as rent, labour, communication, banking, processing of repayments and any other costs related to the administration of a credit agreement”. The Act makes no provision for any charges other than those listed above.

But Van Zyl says the Act does not prescribe what credit providers can charge for value-added services.

Likewise, Pretorius says the NCA governs credit agreements only and prescribes the fees relating to the administration of the credit agreement only.

“The Act does not govern financial services accounts. FNB’s credit card products are credit agreements linked to financial services products, in that you can obtain a FNB credit card product without a credit limit and make deposits that can be accessed through the card. Like a cheque or transmission account, the financial services account portion of the credit card product attracts a fee,” Pretorius says.