FAQ

backBanking

It is an option to use your credit card as a normal bank account. Banks are able to accept deposits into a credit card account; however, you will need to check with your employer that they are able to make payment into a credit card account as many insist on a saving or current account. You also need to keep in mind that the 16-digit number on your credit card is not always the same as the account number, so, for example if your card is lost/stolen/replaced the 16-digit number will change. This means that you will have to notify your employer of these changes to ensure your salary is paid into the correct account.
 
Using your credit card as a transactional tool – if you are pre-funding the balance and don’t use your limit – means you won’t have to pay debit interest. The same is also true if you pay the outstanding balance on your statement in full each month on or before the payment due date (within 55 days). You can also benefit from a higher earn rate on your rewards programme and build a solid credit history. If you use the account as a savings account, and keep a credit balance, you can earn credit interest. This is often a tiered rate depending on the amount. It’s wise to compare the interest on a savings account with a credit card to ensure you get the best rate.

Not found the answer to your questions? Share your question on our forum.

The responsible use of your credit card account including the budget facility certainly can improve your credit rating over time. By enabling an automated minimum repayment and managing your balance within the limit you are building a track record as a low risk borrower that will assist you throughout your life, from buying that first home or car to starting a business. The budget facility is used for purchases and cash advances that can be repaid over six to 60 months. Credit card users can buy as many items as they wish on their budget facility as long as they have credit available in their account. However, there are transactions that cannot be made using the budget facility such as bond instalments, petrol payments and electronic account payments. Budget purchases are subject to interest rates from the date of the purchase and instalments must be made in full every month while the straight facility provides you with up to 55 days interest free credit when paying the outstanding balance in full and on time each month.

Not found the answer to your questions? Share your question on our forum.

There are some banks that have changed their risk acceptance criteria to accommodate customers with low credit scores. However, the best way to find out if you can get a credit card is to consult a financial planner at your bank. They can assist you with the application process as well as advice on the best form of credit to suit your needs. A personal loan may be an option, but in this case you will be charged interest on your loan, depending on the agreement you come to with your bank.

Not found the answer to your questions? Share your question on our forum.

Many banks have specially catered packages for children. One can certainly open an account for children from birth and you would need a copy of the birth certificate to do so. Parents or nominated guardians opening the account will be the Primary user on the account. Shopping around for the best package is dependent on whether you require competitive interest rates, flexibility in deposits or the value added benefits.

Not found the answer to your questions? Share your question on our forum.

A banking account which your money earns interest on.

Not found the answer to your questions? Share your question on our forum.

Yes, but you won’t be able to apply for a credit card because the loan is unsecured and credit card companies require some form of surety that you will be able to pay them back. However, you can apply for a debit card, which is probably a better option for people with credit card debt or financial issues as you cannot overspend. It will also help you to manage your finances more efficiently. To improve your bad credit history, draw up a budget. It won’t solve your financial woes immediately but will show you where you can save, force you to review spending and help you focus on necessities instead of wasting money. You’ll also be less dependent on borrowed money and may even have enough cash to start setting aside to resolve outstanding debts. The sooner you do this, the sooner you can start building up a good credit record.

Not found the answer to your questions? Share your question on our forum.

If you have a good payment record and your account is up to date, you might be able to get a credit limit increase if you can afford it. Speak to your bank directly about the possiblity of increasing your limit.

Not found the answer to your questions? Share your question on our forum.

Overdrafts and credit cards offer different types of credit each with their own advantages and disadvantages. The use of either a credit card or an overdraft facility will depend completely on the manner in which you intend to use the credit as well as the set of advantages and disadvantages you are most comfortable with. Overdrafts are linked to a current account, whist a credit card gives you access to credit on a completely separate account. The interest rates payable on these two options are also likely to differ. Fees for having an overdraft facility differ from bank to bank however a cost will be incurred once the overdraft facility is being actively used. Credit cards offer an interest free period whereas overdrafts do not. This means that if you pay your statement balance on or before the due date every month you could get up to 55 days interest free. Overdrafts on the other hand charge interest from the date of the transaction regardless of whether you pay your balance due on time. Note that credit cards often have a set payment plan e.g. 5% of capital plus fees and interest whilst overdrafts often only require that the account holder deposit their salary into the cheque account every month.

Not found the answer to your questions? Share your question on our forum.

You can simply ask. Phone your bank’s call centre and ask for interest rate review. Unfortunately, however, there is no guarantee that you will actually qualify for an interest rate reduction. Interest rates are often determined by your individual risk profile and if this has not improved significantly you are unlikely to receive a reduced rate. This risk profile is a comprehensive view and therefore paying your account on time every month is unlikely to change your risk profile enough to warrant a decreased rate. If you have missed a payment on any of your accounts (not only with the bank where you hold the card) there is a chance that your risk profile could have worsened and that you won’t qualify for a reduced rate. Note that some products have interest rates that are not personalised. If you have a product like this you can still ask for your rate to be reviewed bearing in mind that the rate might or might not be adjusted. It is worth trying to find out.

Not found the answer to your questions? Share your question on our forum.

The general rule though is that if the site that you wish to purchase from requests a security code, a valid code would have to be entered in order for the transaction to be processed successfully.

If such a code is not printed on the card then this card cannot be used to purchase online.

Not found the answer to your questions? Share your question on our forum.

Different banks have different rules. At First National Bank (FNB) if it is a new cheque account and no money has been deposited into it yet, it will be closed after six months. The bank will communicate with the customer via sms and/or letter to attempt to have the account activated and utilised before closing it.
Where the account is active, money has been deposited and withdrawn but is not overdrawn, after three months of it not been used, it will become inactive. Depending on the credit balance, the account will become dormant between the third and the eighth month.
 
Balances less than R1000 will become dormant after three months, balances above R1000 and less than R100bn will become dormant after six months with balances above that becoming dormant after eight months.
 
The account will remain dormant for 30 months after which FNB will close the account. At any stage of the process customers will be able to r-open the account, providing identification and proof of residence.
 
After a further 12 months the account will be purged from the system. Under no circumstances can the account be re-opened once it has been purged. A new account will have to be opened. The customer will be able to claim any funds that may have been in the account at the time of closure.
 
Where an account is overdrawn different rules apply and the bank will close the account after three months. The bank will communicate via sms and phone calls with the customer soon after the account is overdrawn. A letter of demand requesting repayment will be sent to the last known address giving the customer 30 days to rectify the situation.
If the account is not rectified within the specified time it will be closed and purged from the system after a year. The customer will be held liable for the amount outstanding.

Not found the answer to your questions? Share your question on our forum.

Unfortunately you do need proof of residence in order to open up a bank account at Capitec Bank.

If you are working, you can request for your employer to write a letter confirming your residential address and use that as proof of residence.

Not found the answer to your questions? Share your question on our forum.

It is an option to use your credit card as a normal bank account. Banks are able to accept deposits into a credit card account; however, you will need to check with your employer that they are able to make payment into a credit card account as many insist on a saving or current account. You also need to keep in mind that the 16-digit number on your credit card is not always the same as the account number, so, for example if your card is lost/stolen/replaced the 16-digit number will change. This means that you will have to notify your employer of these changes to ensure your salary is paid into the correct account.
 
Using your credit card as a transactional tool – if you are pre-funding the balance and don’t use your limit – means you won’t have to pay debit interest. The same is also true if you pay the outstanding balance on your statement in full each month on or before the payment due date (within 55 days). You can also benefit from a higher earn rate on your rewards programme and build a solid credit history. If you use the account as a savings account, and keep a credit balance, you can earn credit interest. This is often a tiered rate depending on the amount. It’s wise to compare the interest on a savings account with a credit card to ensure you get the best rate.

Not found the answer to your questions? Share your question on our forum.

In general, the minimum monthly payment is calculated on 3% of the outstanding balance or R25 whichever is greater. However, this only applies when the budget facility is not used, the account is not in arrears, and the account is not over-limit.

The minimum monthly repayment for Standard Bank Accelerate Credit Card and MasterCard (un –embossed) is calculated at 10% of the outstanding balance or R100 whichever is the greater where the budget facility is not used.

The minimum repayment for Access Credit is 3% of the customer’s credit limit. If your minimum monthly payment is not made on time, you will be charged a late payment fee. Check our credit card pricing guide for details.

Not found the answer to your questions? Share your question on our forum.

The responsible use of your credit card account including the budget facility certainly can improve your credit rating over time. By enabling an automated minimum repayment and managing your balance within the limit you are building a track record as a low risk borrower that will assist you throughout your life, from buying that first home or car to starting a business. The budget facility is used for purchases and cash advances that can be repaid over six to 60 months. Credit card users can buy as many items as they wish on their budget facility as long as they have credit available in their account. However, there are transactions that cannot be made using the budget facility such as bond instalments, petrol payments and electronic account payments. Budget purchases are subject to interest rates from the date of the purchase and instalments must be made in full every month while the straight facility provides you with up to 55 days interest free credit when paying the outstanding balance in full and on time each month.

Not found the answer to your questions? Share your question on our forum.

As you highlight it is possible to hold a positive balance in a credit card account and local banks typically pay between 0.2% and 3% annually depending on the amount and the prevailing prime lending rate.

This is similar to overnight deposits (call) or savings accounts. Saving using a fixed deposit account. However, could earn you around 7%-8% per annum at present, so this would be a smarter way of saving if you can set the money aside for a longer period.

Not found the answer to your questions? Share your question on our forum.

There are some banks that have changed their risk acceptance criteria to accommodate customers with low credit scores. However, the best way to find out if you can get a credit card is to consult a financial planner at your bank. They can assist you with the application process as well as advice on the best form of credit to suit your needs. A personal loan may be an option, but in this case you will be charged interest on your loan, depending on the agreement you come to with your bank.

Not found the answer to your questions? Share your question on our forum.

While this may vary from bank to bank, you can generally apply for a credit limit increase after six months of initiation of your credit card account. The increase will be based on your card account and other account history with your bank. To apply for an increase you should contact your bank’s customer service centre for assistance.

Not found the answer to your questions? Share your question on our forum.

A retirement annuity is an alternative to a pension fund for individuals that want to provide for their own retirement.
 
You can deduct contributions you make to a retirement annuity from your taxable income, up to  the greatest of: 15% of your non-retirement funding income; or R 1,750; or R3,500 less current pension fund contributions.  If your employer does not have a pension or provident fund, you will therefore be able to deduct contributions of 15% of your income from your taxable income.
 
At retirement, you can take up to one-third of the proceeds in cash.  The rest must be used to purchase an annuity income.

Not found the answer to your questions? Share your question on our forum.