Maintenance cost
I am a holder of a Smart Traveller Gold Card with the Royal Bank of Scotland (RBS). Recently, I received communication from RBS wherein they specified that they will be levying a monthly maintenance fee to all credit card holders [a sum] of Dh10 with effect from February. Although it sounds a nominal amount, it works out to a fee of Dh120 per year. Assuming the banks have approximately 50,000 cards in circulation, the bank is receiving Dh6 million per year. This is not justifiable because when the credit agreement was signed, the card was supposed to be free for life. This contradicts the initial agreement and is an indirect way of collecting credit card fees. This amounts to an additional burden and is not justifiable.
I called customer care and sought a waiver, in the interest of all, but the call centre representative could offer no logical explanation for this fee and instead asked me to cancel the card if I did not accept this fee. I asked him to connect me to his manager, who refused to talk to me. It is clear that banks earn huge amounts at the expense of the card holders and customers and an individual’s revolt is shunted off. I am positive that Gulf News’s effort will lead to a positive response and benefit the community at large.
From Mr V. Krishnamoorthy
Dubai
Mr Omer Shahid Naqi, brand manager, The Royal Bank of Scotland, responds:
Effective February 1, RBS introduced a nominal monthly maintenance fee of Dh10 on all non-Platinum credit cards. In a situation where most banks have increased their interest rate or have scaled back on their features, we have decided not to take away any of the benefits that our customers currently enjoy. Our customers can still watch free movies every week and go to Ski Dubai or Wild Wadi for free every month.
In our opinion, these benefits are amongst the most valuable in the market, and for us to continue to offer them, we have introduced this nominal monthly maintenance fee of Dh10.
An annual fee essentially binds a customer for a full 12-month period. We are charging a monthly fee so the customer pays only for the months they wish to keep the card. None of their money is wasted. Furthermore, our monthly maintenance fee of Dh10 equates to an annual charge of Dh120 far lower than any other annual service charge on the market. These charges vary from Dh150 to over Dh1,000, depending on the type of credit card. Our interest rates also remain on a par with most other credit cards.
It is important to note that RBS regularly evaluates its products and services, which may mean adding more benefits or even reducing charges on certain products, services or promotions in order to remain competitive in the market.
On December 24, when Mr Krishnamoorthy called us, we explained the rationale behind these charges and informed him that these charges cannot be reversed.
When the customer insisted on a response in writing, the supervisor on the floor provided him with our e-mail address where he could address his concern for an official response. We have already written to the customer and provided him a further explanation of these charges.
Mr Krishnamoorthy responds: I would like to highlight that the bank has still not given any valid reason/justification. When the card was issued, it was free for life. Now they are admitting that it is like a credit card fee of Dh120, which is lower than others. Having issued a credit card free for life, how can they charge an annual fee indirectly? There is no value added by this levy, as all benefits remain the same.
In times of global economic downturn, when every individual is trying to save money by cutting costs and when the overall operational cost is falling in all businesses, the bank has absolutely no justification. I think their reply is very general. I thought when Gulf News raised the issue, they would waive the charges. It looks like they are forcing me to take the matter up legally.
Mr Naqi responds: We have been in touch with Mr Krishnamoorthy and, based on his eligibility and the bank’s criteria, with his consent we have upgraded the Master gold credit card to a platinum credit card. Please be informed that RBS platinum credit cards are currently exempt from monthly maintenance fees. The customer has been informed in writing, advising him that his card and PIN are being sent by courier and he should expect delivery within the week. The customer is satisfied with our response.
Please note that the bank’s rationale on introducing the monthly maintenance fee on its credit cards remains the same, as described in our earlier response to you.
Mr Krishnamoorthy responds:
Thank you [Gulf News] for your kind help in taking up the issue with RBS. They have converted my card to platinum so that there is no monthly maintenance fee. Although my issue is resolved, still the community at large stands to bear the charges. If something can be done about that, it would be excellent.
