Customers of the National Commercial Bank (NCB) who hold balances on their local and international Visa cards may be subject to a higher rate of interest if that balance is transferred to the new Visa Classic card which will be introduced in lieu of existing Visa cards come September.
The phasing out of the local and international versions of the Visa card and the introduction of the Visa Classic, a new card that facilitates both local and international purchases with repayment in Jamaican dollars, will take place by September 30, this year. All other Visa cards will become obsolete. Claudette Rodriquez, assistant general manager, card services and EChannels at NCB told Caribbean Business Report that clients are currently receiving letters advising them of the withdrawal of the two products and the conversion of their cards.
"The introduction of our new NCB Visa Classic product was to ensure that we meet our customer demand for one card for both local and international purchases," Rodriquez said when quizzed on whether clients had a choice in the matter. "Through our card offerings we provide our customers with choices, we encourage our cardholders to contact us if they have a concern so that we can work with them to ensure they have the right product to fit their needs," she said.
However, Sharon Beckford, a client of the commercial bank and a cardholder of both the local and international Visa cards, told Caribbean Business Report that she was given no choice in the merging of the cards, and was merely sent a new card and subsequently advised of the change by a letter.
Beckford further outlined that the interest rate on the international Visa card was 18 per cent prior to the change but following the merger with the local version of the card which had a 49 per cent interest rate, the larger interest charge was applied to her outstanding US$9000 ($756,000) balance.
"It is ludicrous for any financial institution to come to you and tell you I am going to charge you 49 per cent on something that you have been paying 18 per cent on," she said.
"It is evident that the National Commercial Bank has not covered all grounds with the introduction of this so-called "merger"," Beckford said. "How can one merge 18 per cent with 49 per cent? Where is the logical formula?" Beckford argued that a logical compromise would be to average the interest rates of the two cards.
However, Rodriquez advises cardholders to pay down their existing balances before they are transferred to the new card to avoid the new interest charges. She said all existing limits and balances are transferred to the new Visa Classic card and the new rates are charged accordingly.
"For a number of our cardholders who pay off their balances in full, they will pay no interest on the new Visa Classic card. For a cardholder who at times may carry a balance, once the card is converted then any balance on the account will be subject to the interest rate of the new Visa Classic card," said Rodriquez .
"We are advising our cardholders three months in advance of the change to allow them the opportunity to pay down their balances at their convenience before transferring to the new Visa Classic," she said. "For those cardholders who are carrying a balance on their International Visa card at the time of conversion, this balance will revert to the interest rate on the new Visa Classic card, however if the balance is paid in full on the statement date then no interest will accrue," Rodriquez added.
Beckford said she has been a client with NCB before the 1981 introduction of Keycard, the first credit card to be introduced in Jamaica, and was one of the first 600 persons to hold that card. She said, given her long relationship with NCB she would have expected the Bank to handle the merger better than they have done so far.
Beckford said that having written to the Bank she has managed to get her balance transferred to a Mastercard that currently has an 18 per cent rate, but the arrangement has not yet been confirmed with an official statement from the institution.
"I want the other people in Jamaica to be aware of what is happening," Beckford said. "If they have calculated at the 49 per cent I am going to contact the FSC (Financial Services Commission)," she added.
It is the second time in as many weeks that there has been a call for the intervention of regulatory authorities in the matter of fees and interest charged to customers. Last week customers questioned the role of the regulators following the revelation that they were being charged a fee for account balances which fall below a minimum.
NCB claims the largest cardholder and merchant base in Jamaica and 75 per cent of the market share in the bankcard acquiring business. It currently has 73 per cent of all merchants and holds 79 per cent of all multilink point of sale transactions. Cardholders are asked to contact the Customer Care Centre to address any issues or concerns.