Consumers encouraged to query store card fees


“I spoke to the National Credit Regulator about this issue and they said that you are entitled to a quote and a pre-agreement notification. When you do sign on the dotted line, they are supposed to make you aware of these rates and charges,” Angelique Ruzicka, editor of Justmoney and Moneybags, told CNBC Africa.

“If consumers come across a pre-agreement notice and they don’t see the rates and charges in front of them, or if they haven’t been informed properly, I would advise that they then ask the store card promoters or even call in before signing on the dotted line, and find out what exactly it is that they are up for when it comes to these charges.”

A recent survey by personal finance website ‘Moneybags’ found that store card promoters are not well-informed when it comes to the store card fees and charges they are promoting.


According to the survey, seven out of 10 retail store employees could not accurately tell consumers what the rates and fees were.

“The findings that we had in 2012 were exactly the same – we had seven out of 10 store card promoters that were not aware about the fees, insurance costs and also the interest rate charges for the store cards that they were promoting. It was very disappointing to find that things hadn’t actually changed,” Ruzicka said.

“It’s definitely a training issue and it’s an issue that needs to be addressed considering that it’s the second time that we’ve had the same findings. Consumers should be told right from the start what the costs are that are associated with store cards.”

Ruzicka also indicated that, according to the National Credit Act, when it comes to store cards and credit cards, people should only be charged up to 21 per cent.

“Some of the store card promoters thumb-sucked rates and charges when I asked them what they were. Some of them claimed that they were as high as 23 and 24 per cent. Some said very close to what the actual rate was,” she said.

“You’ve got card insurance protection costs that you have to pay as well. You’ve got card maintenance fees – some have that kind of charge every month. You also have initiation fees. These are the kinds of charges that you could expect on 12 month store cards and maybe six month store cards as well. It’s key to find out what it is you’re up for because you could be paying hundreds of rands a month.”