Service fee

I have the honor of possessing a Citibank Gold Master Card, for which privilege I pay Rp 250,000 per year "service fee". I am privileged with having to argue with local merchants not to charge me extra for using the card. Having had other Master Cards, as well as other credit cards from several parts of the world, a most unusual local bank policy appears to be creating a situation so that now, I never sleep. I should say here, that in the several years of using the Citi Master Card, I have gone past the two-week interest-free grace period for monthly payments only once. This was because the duration of my out-of-the-country business trip was extended.

In this instance, immediately upon my return, I paid the entire amount in full, as is my usual custom, and begrudgingly paid the exorbitant interest together with the following month's bill. An unusual Rp 5,000 monthly charge periodically has been appearing on my monthly statement. After repeated inquiries to the bank, I was finally informed that this was an "additional fee" charged for my monthly statement amount being paid in full, in cash. Most businesses throughout the world welcome cash. Many places even offer discounts for cash payments. Has the rupiah sunk to such a level that a major international bank must now charge a penalty for the use of Indonesian legal tender? What do they know that we don't?

I indicated to the bank that I thought this was ridiculous. Nowhere on the initial agreement was there indicated, nor authorized, a penalty for paying one's bill in full, in cash. They responded to my argument the following month in the form of an additional Rp 5,000 charge. Because I disputed this illegal charge and did not pay, there appeared on my next monthly statement a charge for an alleged purchase involving Rp 10,000 and an accompanying Rp 20,000 late charge. This would appear to be a 200 percent monthly or 2,400 percent annual late fee.

In addition to this, the bank also charged Rp 1,000 in monthly interest. By my calculations, this amounts to an interest rate of 10 percent per month, or an uncompounded 120 percent per year interest rate. The end result, according to the bank, is I now owe a Rp 31,000 fee for being a good customer and paying on time, in full as agreed. Perhaps some other reader with knowledge of Indonesian Law would offer an explanation on the legality of a client being billed in rupiah, the legal tender in Indonesia, paying in full in rupiah and then being charged a penalty for doing so. Citibank never explains, maybe because they never sleep.

JOHN NEWCHOK

Jakarta