ADDING FUEL TO THE BANK CHARGES ON CREDIT CARDS

As more and more garages accept credit cards for fuel, it appears that the banks now charge interest from date of purchase for this type of transaction.
The banks on the other hand argue that fuel transactions on a credit card carry no costs as this is regarded as a regular retail purchase. But credit card
statements indicate otherwise.

The Star’s Personal Finance looked at the cost of using cash, debit cards and petrol cards and of all the methods of payment – credit cards came out the most
cost-effective. However, readers reported to Personal Finance that the story was inaccurate – they are charged a transaction fee as well as interest from the
date of purchase when using a credit card to pay for fuel.

In the end Sugendhree Reddy director of banking at Standard Bank admitted as much. The article also quoted Arif Ishmail of the Payments Association of SA
as saying “a fuel purchase must be treated as a retail purchase and not a cash advance”. Reddy said Standard Bank was reconsidering its position and by the
end of January would like to have rectified this.

Personal Finance then contacted ABSA, Nedbank and FNB and all confirmed what Ishmail had said. Barrett Whiteford, head of FNB Credit Card Marketing
says a Linked Petro Card is a non-Visa labeled FNB card that is linked to a credit card account and the way the banks charge for these products is
different. But at the end of the day there are two cards and one statement.

After Standard Bank owned up to treating fuel transactions as cash advances (so did FNB) Personal Finance asked Pasa what it was doing about this
breach of rules by its members to which it replied that this matter would be dealt with in terms of the Pasa constitution and policies. Pasa constitution allows for
the Council to impose a fine not exceeding R1 million and penalties would be based on factors such as the nature, duration, gravity and extent of the matter.