I bank with a well-known national bank. We’ll call it CurrentBank. I’ve banked with CurrentBank, for more than a decade. I like to keep things simple, so I don’t have any other accounts. But as soon as BankSimple is up and running, I will open an account with them. Read on to find out why.
I recently booked airline tickets on Cathay Pacific for my in-laws who live in India, to come spend a few weeks in the holidays here with us in the Bay Area. I made the booking on Cathay’s website using my CurrentBank debit card. A few days later I was shocked to learn that CurrentBank had hit me with a fee of $234.92 for “international transaction fees”. I scrambled and called CurrentBank, who basically said, sorry, but read your contract.
I of course knew about those international transaction fees. I see them all the time when I use my card outside the US. But how am I supposed to know that sitting in the Bay Area I can be hit by these fees while buying tickets on an international airline. I had never paid any transaction fees on Cathay before this and this was not the first time I was buying tickets online on Cathay, though the trip always originated in the US.
Wouldn’t it be really simple for Visa and/or CurrentBank to pop a message while the transaction is being processed that said “Please note that CurrentBank will charge you an additional fee of $234.92”. Something that is always done at ATMs around the country. But why would they. You see, the card holder might have second thoughts.
The objective, you see, is not to serve your customer’s interests. It is to lure him in by “free checking” and other tall claims and then trap him with well-laid traps.
You might say, “Hey, you should have read the contract.” I offer an analogy to whoever might pose that question. Suppose you went to an e-commerce website. You clicked on the “I agree” button. The agreement that you just agreed to included a line that said “A service charge of 3% will be charged to your credit card for every purchase.” You then did your holiday shopping and then discovered in January that the e-commerce company hit you with an additional charge. You’d be pissed, wouldn’t you? So am I.
Earlier this week I got hit by a fee of $15. My account is not supposed to have any fees, but there must be a good reason why they hit me with a fee. I’ll never know. Their online statement gives no explanation. And it is not worth my time to call and find out what the fee is about. They probably concluded long ago that saying too much in transaction statements just raised unpleasant questions. And who wants to deal with those pesky customers.
I know CurrentBank needs to make a profit. I know that they’ve been hit big time by the cap on debit card fees (which the retailer pays). But I’d be much happier if they charged me whatever they needed in an upfront and transparent way. Don’t lay traps.
That’s why I am rooting for BankSimple. I have no problem paying a fee for checking. I know it costs money to provide a good service. But I want the services and fees to be simple, upfront and transparent.
You might say, why BankSimple, maybe this is just a CurrentBank problem. Try another bank. I don’t have to. I know all of them suffer from the same problem. They are all busy “leveraging their customer base.” After gazillion acquisitions, the way they compete has come down to reducing costs and getting more out of the existing customers. Unfortunately, the latter often means ambushing them in dark alleys with hidden fees.
C’mon Basab- do us all a favor and tell us the name of ‘CurrentBank’. It was atrocious what they did
Doesn’t matter Madhu. All big banks have the same outlook on business today.
They got the TARP, now they need to TRAP someone 🙂
they are the Bulls Of America ( thats a hint on the bank name )
I would guess CurrentBank is Bank of America. The same happened to me a while ago booking tix on Qatar Airways.
For such reasons I keep a Capital One credit card. They are the only ones I know of who dont have foreign fee transactions.
In Indian context the competition to acquire new customers is so fierce in say home loans, credit cards, mobile/internet service providers etc. The service fee and switching cost is low, they offer freebies to new customers and then absolute loot on existing customers.. Wish more of BusinessSimple were there!!!
I thought this happens only if the transaction is quoted and completed in a foreign currency.
BankSimple will face multiple challenges. Just look at what Square is going through, as an example. Will a startup be able to manage these processes – we will have to wait.
Interestingly, BankSimple and Square are both from Twitter alumni