A credit card is a great way to borrow money against a line of credit, with a wide range of cards available in South Africa catering for your specific need.
Boiling down various credit accounts to comparable metrics is a difficult task, as each account carries its own value proposition – from rewards, to bundled options with transactional accounts and appealing interest rates.
Interest rates are one of the key differentiators, but as is often the case with lending and credit, it is not a constant and is customised to each banking customer based on their credit profile.
However, there are three key metrics we can look at for comparison – monthly fees (including the credit account fee and credit facility fees), as well as the initiation fee for new accounts, and the minimum salaries required to qualify for the accounts.
Across most credit accounts, some things are constant:
- Most banks offer 55 days interest free credit, with the only deviations being Absa (which offers 57 days) and African Bank (which offers 60 days).
- Most banks offer personalised interest rates based on credit profiles, tied to the repo rate.
- Most banks offer maximum credit limits based on an individual’s affordability profile, and is one of the reasons there are so many credit card options available.
- Most credit transaction fees are the same as same level transactional accounts.
These metrics can’t be viewed in isolation though, as even low monthly rates can hide other costs.
For example, while the Virgin Money Credit Account (a co-branded Absa account) offers zero monthly account and credit facility fees, it is tied to the highest interest rate possible (20.75%) with no personalised rate based on your credit profile.
Capitec’s credit card option offers up to R150,000 credit based on your profile. This carries an initiation fee of R100, and a monthly fee of R35.
The bank’s credit facility of R5,000 is a separate charge with its own initiation fee (over R172) and a monthly credit facility fee of R35 to R69, depending on money owning. Because of how Capitec deals with the credit facility it is considered a separate product.
On the subject of initiation fees, while Absa’s fee schedule for 2019 does not mention an initiation fee for its credit products, it’s Private Banking Credit account, and co-branded accounts like British Airways Credit and Virgin Money Credit all carry a R170 initiation fee.
Absa confirmed that this fee applies to all its credit products.
The Nedbank SAA Voyagers cards, meanwhile, have no initiation fee, but carry annual maintenance fees of R700 and R2,044 that need to be paid. So while the monthly fees that do apply are relatively low, these payments need to be considered.
It’s also worth noting that many banks require a monthly subscription fee to link to their rewards programmes, which can add to the monthly cost of servicing the account. FNB links to eBucks for free. Standard Bank’s uCount programme costs R24 per month, while Absa rewards cost R23.20 per month and Nedbank charges R22 a month.
The table below outlines South Africa’s credit options based on their monthly fees (including credit account and credit facility fees).
|Credit Account||Initiation Fee||Monthly Fees||Income required (p/m)|
|Virgin Money Credit Account||R170.00||None||R5 000|
|Absa Student Credit Account||R170.00||R25.00||R800|
|SAA Voyager Gold Credit (Nedbank)||R700 pa||R31.14*||R6 700|
|SAA Voyager Premium Credit (Nedbank)||R2 044 pa||R31.14*||R25 000|
|Capitec Global One Credit||R100.00||R35.00||R3 000|
|FNB Gold Credit||R175.00||R48.00||R7 000|
|Absa Affinity Credit||R170.00||R50.00||R4 000|
|Absa Gold Credit||R170.00||R50.00||R4 000|
|Standard Bank Gold Credit||R175.00||R54.00||R5 000|
|Discovery Gold Credit||R166.45||R59.00||R7 000|
|Standard Bank Titanium Credit||R175.00||R69.00||R25 000|
|African Bank Silver Credit (MMI)||R115.00||R69.00||R2 000|
|African Bank Gold Credit (MMI)||R115.00||R69.00||R2 000|
|Nedbank Classic Credit||R189.65||R72.00||R5 000|
|American Express Gold Credit (Nedbank)||R189.65||R75.00||R5 000|
|Nedbank Gold/Greenbacks Gold Credit||R189.65||R75.00||R8 400|
|Absa Premium Banking Credit||R170.00||R80.00||R25 000|
|British Airways Credit (Absa)||R170.00||R80.00||R8 000|
|FNB Premier Credit||R175.00||R87.00||R25 000|
|Standard Bank Platinum Credit||R175.00||R89.00||R58 000|
|Discovery Platinum Credit||R166.45||R90.00||R29 200|
|American Express Platinum Credit||R189.65||R99.00||R5 000|
|Nedbank Platinum/Greenbacks Platinum||R189.65||R99.00||R29 200|
|Absa Private Banking Credit||R170.00||R99.00||R62 500|
|FNB Private Clients Credit||R175.00||R199.00||R62 500|
|FNB Private Wealth Credit||R175.00||R249.00||R125 000|
|Standard Bank World Citizen Credit||R170.00||R255.00||–|
* Includes credit facility fee and self-service banking subscription fee.