Readers ask:
We have received several queries from readers about merchants charging for the use of credit or debit cards. Readers have had experiences where, when they come to pay for an item in a store, the merchant informs them that they will have to pay an extra 5% if they wish to use their credit or debit card. Is this allowed?
Maya Fisher-French replies:
According to the banks, this goes against the rules of the Payments Association of South Africa. Once merchants choose to offer a debit or credit card facility, they may not directly pass on the cost of what their banks charge them for providing the service. They can, however, build it into the price of their goods and therefore offer a discount for paying with cash.
But, if, a store holds a sale, it may state that there are “cash only” prices and therefore charge a higher price to people using plastic.
The bottom line is that, unless a merchant has stipulated a cash-only price, he or she may not charge an additional fee for accepting credit or debit cards. The banks request that the consumer report the merchant to the bank which has provided the merchant with the card facility.
Vishal Ishwarparsadh writes:
I am a South African currently living and working in the United States. One of my prime objectives for being here is to save a decent amount of cash as capital to reinvest in South Africa when I get back.
When I return, I will be looking for a online discount brokerage service (to invest on the JSE) with reasonably low fees. I can’t seem to locate any. In the US, various ones exist such as Ameritrade, Scottrade and Fidelity. Do you know of any that operate in South Africa in this way? I know Standard Bank has online share trading accounts, but are there others?
Maya Fisher-French replies:
Unfortunately, South Africa does not have an active discount brokerage industry as exists in the US. Many discount brokers went bust in the market crash in 2000 as the number of private investors diminished.
Discount broking is a volumes game and currently in South Africa we do not have the volumes to offer really cheap trading.
Nevertheless, there are several online brokers who offer services that are well priced relative to a full broking service.
Standard Bank Online offers an excellent service as well as a cost-effective way to buy smaller amounts of shares on a monthly basis in order to build up a portfolio. Other major online providers include BJMdirect, ABSA Online and PSG Online. There are also some smaller players such as Tsec, Anglo Rand, Imara, SP Reid and SA Stockbrokers. Sanlam has also recently introduced its online offering, iTrade.
When selecting an online broker, make sure you compare like with like on costs. More expensive brokers may include highly rated research and interactive systems which use SMSs to keep in touch with your portfolio, notify you of major changes to share prices on your watch list as well as provide a quick way to look up a share price. Some brokers offer free seminars on trading for clients and general market education.
Check your credit
Readers ask:
We have had several queries from readers about how they can access their credit records.
Maya Fisher-French replies:
As from September 1 2006, consumers can receive one free report a year from the credit bureaus. Thereafter the cost is R20, excluding VAT, per report. Currently, there are two credit agencies: Transunion and Experian. The National Credit Regulator will be forming a national bureau, but this is likely only to hold the credit extension data of each consumer as opposed to a full credit history.
Because of increased demand from consumers, both bureaus only provide the free credit record from the consumer’s birthday month — similar to the way in which new drivers’ licences were rolled out. In other words, if your birthday was in October you can request your free credit record at any time, but if your birthday is in February, you will have to wait until February before requesting your free check. Until then, if you want to see your credit record before your birthday month you must pay the R22,80. From September next year these restrictions fall away.
Credit record contact details: Experian 086 110 5665 and Trans-union 0861 482 482.
Tips to help you save
M&G Money in conjunction with Metropolitan Odyssey is running a competition for the best savings tip of the month. Savings start not with putting money away but with finding ingenious ways to cut expenses. The reader who sends in the best tip for next month will win a a black leather-bound 512 MB USB memory stick with detachable lanyard, valued at more than R300.
Please submit tips to [email protected], or fax to 088 011 883 9496, or write to PO Box 91667, Auckland Park 2006.
Savings tip of the month
The winner of the savings tips this month is Hanne Veenstra who will be receiving the 516 MB USB memory stick.
“If you have bread that is getting old but does not yet have mould, make it into ‘Melba toast’. Slice it and put the slices in a single layer on the grid(s) of the oven at about 100°C to dry out until crisp. Keep the toasts in an airtight container or plastic bag and eat them with cheese, snacks or dips. Or, if you need breadcrumbs for a recipe, take some of the toasts and grind them up in the liquidiser or with a pestle and mortar.