Here at Savings Guide, we encourage people to submit their own money saving tips. Especially juicy tips like this direct from an employee of a major Australian bank!
The person who submitted this tip wishes to remain anonymous. We thought it was a very enlightening read and definitely worth sharing.
Here it is:
Dear Savings Guide,
I work for a large bank, and credit cards can be great and they do work well when you understand and use them properly.
The biggest problem we seem to come across is customers inquiring on interest charges, fees (late payment, overlimit, cash advances etc) and not understanding why they have been charged, and genuinly believing that it was a bank error.
You need to keep in mind that the bank supplies you with all relevant information before you activate the card to completely understand how it works and to avoid those extra costs.
My biggest credit card tip?
READ AND UNDERSTAND THE TERMS AND CONDITIONS BEFORE YOU ACTIVATE THE CARD.
If you don’t understand you can always call to have things clarified with a trained consultant with most large banks having a 24hr general inquiries line available to call.
Don’t get too excited when you get the shiny new card that you miss the most important step, as part of activating the card you MUST agree to reading these terms and conditions (otherwise the card will not be activated until you do) therefor you are forfeiting any right to a refund of fees/interest because you ‘didn’t know’, ‘didn’t understand’ or ‘weren’t aware’ – because really you should have been.
We get a lot of customers calling and saying “that’s not fair!” or “Ohh… I didn’t know that” and it isn’t a very nice thing to have to state that its in your terms and conditions.
Well the usual response is something along the lines of ” Yeah but who actually reads those?” and then telling the customer well you did, you agreed to reading and understanding them. Unfortunately they have no where to go from there and usually start bad mouthing the bank for all sorts of reasons (mainly because they let themselves down.)
Now, I’m not sticking up for the banks, because honestly, before I started working there i didn’t understand the T’s & C’s either, I was just to excited to activate the card and start spending, so I myself had to learn the hard way too, and unfortunately i was unable to blame the bank, and received the same type of spiel, which was not nice to hear.
The banks are big businesses with every corner covered in every situation and while we may think its mean or unfair that they “get away with highway robbery” – you as a consumer, applying for credit with an institution also need to take some responsibility for your own accounts, credit cards and actions (or lack of actions).
At the end of the day you are the only person in control and aware of your balance and required payments, if you do not want to pay interest – well then don’t spend beyond your monthly means! The bank is providing you a service of utilizing their funds at you convenience, and that is what you applied for, not the bank forcing you to.
Money on credit cards is the banks money
We all need to remember sometimes that a credit card is the banks money, and it is a privlidge not a right to have one, as customers often state “you can’t block my credit card, that’s my money!” well no its not your money, and yes the bank has the right to stop you spending more of their money until you satisfy at least the minimum payment.
So bank smart, read and understand what your agreeing to and take some responsibility because at the end of the day if you get into strife with your credit card, it’s only yourself that put you into that position. Stop blaming everyone else and read the information provided because you will never win that battle with a bank. Sad but true. They have covered their behinds, so why not cover yours!
I know I may sound a tad harsh, but sometimes credit card holders need to be reminded of a few things.
So get some knowledge under your belt and be smart!!
Note from editor:
Savings Guide here, I totally agree with ‘anonymous’ regarding taking responsibility with your bank issued credit cards – to me it is a given that people think like this and the only way to become accountable for your money spending antics! The only thing I would like to add is that sometimes I disagree with the banks policy on credit limits. I have seen students who were given a $20,000 limit at the age of 19 while studying full time and working casually at Bakers Delight. To me, that was a very big miscalculation. Although the spending of that $20,000 is up to the student, I believe their is a level of social responsibility that the banks must acknowledge.
Thanks for the tip! Please submit your own if you have the time!