Service fee

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