OCBC Spare Change? How?

[Leepee]

Can any financial expert care to explain?

These finaicial experts are really good at comming up with many innovative schemes!

This new twist to Credit cards payment scheme, is a little confusing.

 

I buy a $4.8 item using credit card.

The end of month charge will be billed to me at $5.

After I will settle the credit card bill at the end of the month, the 'overcharged' $0.20 will goes to my OCBC bank account. (isn't it a LPPL situation)

 

So where is the advantage? HUR?

 

When will the 0.4% rebate be given? At the point of purchase? Or in the 0.4% reduced monthly statement?

 

 

 

 

http://business.asiaone.com/Business/News/...1110-99441.html

 

Mon, Nov 10, 2008

my paper

 

 

OCBC Bank has launched a new feature for its credit and debit cards that allows cardholders to save as they spend.

 

With SmartChange, every purchase charged to an OCBC credit or debit card will be rounded up to the next dollar, with the difference being banked into a designated OCBC savings account.

 

For example, a bill of $4.80 for a cup of coffee will be rounded up to $5, with the 20 cents of "spare change" deposited into the customer's savings account with OCBC Bank.

 

This, said the bank, is different from other save-as-you-spend schemes that offer rebates or savings that can be used only to offset future expenditure charged to the cards.

 

SmartChange gives actual cash savings which are deposited directly into the cardholder's bank account. Those who sign up for the feature will also get a 0.4-per-cent rebate on their purchases.

 

Said head of lifestyle credit Lynn Gaspar: "While all of us brace ourselves for tough times ahead, it is not realistic to avoid spending altogether.

 

"SmartChange helps our card members save effortlessly while making everyday purchases or spending on life's little indulgences."

 

Besides their personal savings accounts, OCBC cardholders can also choose to channel their "spare change" to other accounts with the bank, including the OCBC Children Development Accounts.

 

This would allow parents to help their children save, said OCBC Bank.

 

Referring to the "spare change", Mr Nicholas Tan, head of global wealth management, said: "While the amount from one OCBC card member may be small, the combined contributions from several adults can be quite significant."

[Sabian]

It is not confusing.

 

Imagine if you rolling over balances... and every damn thing u swipe now gets rounded up.

 

Your interests also get rounded up as well?

[Leepee]

I think there is a potential trap for those who always pay minimums or is late in payments. Those rounded up $$$ will surely add up to the additional interest $$ the bank can earn from the card holder.

 

But then I am asking what is the advantage for those who never or-tang and always pay on time?

[Try_conti]

yah man ...those who use to roll over balances will die as everything now becomes more expensive ....

 

so they're actually making you spend more 'future' money now ...

[Ultramega]

i think i have seen such schemes in US as well. The TV ad says Americans save billions of dollar thru the scheme. i was like... HUH? i don't see the benefit too.

[Try_conti]

actually no advantage. They are in essence taking money from you by force. Everything that's rounded up goes to ocbc account. You are forced to pay rounded up amount.

 

And banks always use your $$$ for their own purposes

 

So infact, you're forced to 'save' with ocbc and giving them $$$ to spend.

[Xtrider82]

It's just a scheme invented by OCBC to get you to contribute money to their bank reserves while you spend.

 

Nowadays banks are hard up on reserves, this way they can get their Credit Card spenders to help contribute to their reserves so they can loan out some more.

 

The 0.4% rebate is just a little carrot they dangle to make people spend more.

 

Look at it this way, you pay $5 for $4.80 coffee. 0.4% rebate on $4.80 is $0.0192.

 

Using the $0.20 they made you "save", OCBC loans the $0.20 to some fella, and charge 24% per annum interest. 1 year later, the fella returns $0.248 to OCBC.

 

Go do your sums on how much profit the bank will make.

 

Woefully transparent tatics.

[Stary]

seems like a good scheme for the bank, but could be worse for the consumer.

 

So, now if $4.10 will be charge as $5.00 right?

 

To me, no savings at all.

[Sabian]

But the 0.90 will be deposited into the customer acc. so u do not lose in that sense.

 

I only curious when will they credit all these loose change back to the customer. Is it immediate? only after a month?

[Acemundo]

basically, is a scheme to get folks to deposit more money with ocbc....

[Try_conti]

but you paid the 0.90 upfront first in the cc statement. so you're still spending more than you ought to and the bank will laugh as everytime you use their card, you send $$$ their way .....

[Rayoh]

yea man... The first thing to came to my mind is they are getting pple to open up accounts with them... More deposits means the bank holding more cash money... Getting ready for storms ahead??

 

If i'm not wrong, their minimum deposit is about 1K. Anything less will be subjected to admin charges every month.

 

Nonetheless, I must say they really have great ideas to suck more cash out of common folks.

[Cheekg98]

nothing fantastic lah ... just another marketing idea to encourage spending ... no matter what, the banks still gain ...

 

if u go and see yr spendings, how much of yr spending, esp big items, give u change (cents) back ? usually $199, $1999 ... all round up liao ...

 

Edited November 11, 2008 by Cheekg98

[Cheekg98]

so u sign up already?

[Silver_blade]

Doesn't make sense to me. If I want to save,I will do it on my own....don't need CC to help.

[Leepee]

don't understand the advantage actually. If it's not clear thru the public advert, then there must be some untold pitfall. So did not even bother to go ocbc and waste my time asking!

[Silver_blade]

I think this scheme is 'help' you save money. But honestly, if you need the credit card company to help you save a few cents of your own money each time you use a credit card...then you are better off not having a credit card.