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THE BANK FEES REFORM
Guide: How can the reform help you?
The bank fees reform, which went into effect on July 1, 2008, enables customers to obtain allthe relevant information regarding the fees charged by the banks, to compare them, and todecide which bank should handle one's account.In the wake of the reform, customers will
know
the cost of the bank service they wish toobtain, will be able to
compare
the prices offered by the banks or other bodies providing thesame service and between the prices of alternative services, and
decide
how to act. Thus, forexample, customers can request better conditions from the bank that handles their account, orif necessary, even transfer their account to another bank.The reform will help customers to become wiser consumers of banking services. Informedconsumption in the area of banking, as in other areas, will help to promote competition andimprove the conditions offered to customers.This guide provides information on the following subjects:
•
What is particularly important to know and to compare?
•
How can I examine the activity in my account?
•
How can customers unable to perform their current-account activities using the directchannels avoid paying fees?
•
Recommended examinations that you should carry out on your current account.
•
Recommended examinations that you should carry out regarding your credit card.
•
Recommended examinations that you should carry out when you take a mortgage loan.
•
The recommended order of actions in order to achieve the maximum benefit from thereform.
What is particularly important to know and to compare?Every customer should compare prices of the services the banks charge him for his
currentaccount
(especially regular operations in the account
), the cost of
holding a credit card
, the
cost of credit
(particularly interest) etc.The reform will lead to three major changes that will make it easier to compare banks:
•
The number of fees for consumer services was reduced by about two-thirds as a resultof unifying and canceling fees.
•
Henceforth, identical services will be given the same name in all the banks.
•
The standard fees (current account, mortgages and credit cards) will be available in aformat that makes it easier for customers to check and compare them.How can I examine the activity in my account?Customers are able to examine the nature of their banking operations (and especially theircurrent-account transactions) by checking printouts of their account several monthsretroactively. Customers will also be able to study printouts for previous periods (which arealso sent to them by regular mail) on the Internet and by means of ATMs that the bank willplace at their disposal.How can customers unable to perform their current-account activities using the directchannels avoid paying fees?According to the reform, consumers who do not hold means to perform their current-accountactivities using direct channels, elderly people and disable customers who due to theirdisability cannot handle one or more direct channels
are able to execute 4 monthly over-the-counter transaction at the price of direct channel transactions
. Make sure to demandsuch a discount if you are entitled to it and return your means of performing direct activitiesif they are unused.Recommended examinations that you should carry out on your current accountPay particular attention to the following current-account services:
•
Current operations
—both in the direct channels and the current operations carriedout by a teller.
•
Cost of credit facilities
—interest or a fee for granting credit facilities.
•
Cost of credit card
—credit-card fee.You can find comparisons of fees in these areas, as well as calculators for comparing costs orforms for carrying out an independent comparison, on the Bank of Israel website:www.bankisrael.gov.il Recommended examinations that you should carry out regarding your credit cardPay particular attention to the following services connected to your credit card:
•
Credit-card fee-
In the wake of the reform, a single monthly fee is now paid forcredit cards-the credit-card fee. You should compare the fee for the credit cardoffered by the bank with the fee offered by the credit-card companies for the cardsthey issue directly. Customers are not obliged to hold credit cards issued by their bank,but can directly contact any credit-card company they choose. Check whether anydiscounts are given on these fees and based on what criteria.
•
Deferred-payment fee
- for customers who regularly conduct transactions by meansof installments.Recommended examinations that you should carry out when you take a mortgage loanWhen you take out a mortgage loan, pay particular attention to the
rate of interest
. Makesure to compare the rates of interest for the loan offered by different banks.The recommended order of actions in order to achieve the maximum benefit from the reform1.
What are the most frequent actions you undertake? Examine this on the printouts youreceive from the bank, and identify the types of transactions you undertake and theirprices. The comparison form is useful in this respect.
To download the form
:www.bankisrael.gov.il
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