5 Hidden charges you should know! | Money Psychology

Summary

In this engaging script, a conversation unfolds about financial savings and awareness. The dialogue begins with the discovery of a credit card offering with no annual fees and cash back, prompting a discussion on ensuring such offers are documented to avoid hidden charges. It progresses to advice on dealing with banks regarding inoperative accounts and unnecessary fees, highlighting the importance of knowledge about RBI's rules. The script also touches on GST implications for businesses under the composite scheme and concludes with practical tips on reducing loan tenures to save on interest and using premium accounts for waived delivery fees, alluding to the theme of being vigilant in personal finance.

Takeaways

• 💳 A new credit card with zero annual charges is being promoted, offering cash back, discounts, and various offers.
• 📞 The importance of getting promises in writing is emphasized to avoid hidden fees or disputes with financial institutions.
• 📧 If unexpected charges appear on a credit card, customers should refer to written agreements and request a reversal of charges from the bank.
• 👮‍♂️ In case of unresolved disputes with banks, customers can file a complaint with the Reserve Bank of India's 'ombudsman' portal within 31 days.
• 🏦 Banks cannot charge fees for an inoperative account that has had no debit or credit activity for two years, according to RBI regulations.
• 📈 The script highlights the impact of the RBI's repo rate increase on loan tenures and the strategy to keep EMIs the same while extending the loan period.
• 📊 To minimize interest paid on loans, it's advisable to increase EMIs rather than extending the loan tenure when interest rates rise.
• 🍦 An ice cream order scenario demonstrates how to save money by opting out of delivery fees, especially when using a premium account.
• 🛒 The script points out 'dark UX patterns' where delivery fees are not automatically waived, even with a premium account, and must be manually selected to save money.
• 💡 The character in the script is proactive in seeking and implementing various strategies to save money, from financial products to everyday purchases.
• 🔍 The importance of checking whether a business is registered under the composite GST scheme to avoid paying unnecessary GST is highlighted.

Q & A

What is the main offer discussed in the script related to the new credit card?

The main offer discussed is a new credit card with zero annual charges, cash back, discounts, and various offers.

What is the concern raised by the character regarding the credit card offer?

The concern is about the possibility of hidden charges despite the promise of zero fees, and the importance of getting the offer in writing as proof.

What advice is given if the bank charges fees contrary to the 'zero fees' promise?

The advice given is to request the bank to reverse the charges, citing the written promise, and if they do not comply, to file a complaint with the Reserve Bank of India through their 'ombudsman' portal.

What is the term used for an account that has had no debit or credit activity for two years?

The term used is 'inoperative account'.

According to the script, can a bank charge fees for an inoperative account?

No, banks cannot charge fees for an inoperative account as per the rules mentioned in the script.

What is the significance of the RBI's repo rate increase mentioned in the script?

The increase in the repo rate could lead to an increase in the interest on existing loans, potentially affecting the loan tenure and the total amount of interest paid.

What is the strategy suggested to handle an increase in the repo rate by the bank?

The strategy suggested is to ask the bank not to increase the loan tenure but to increase the EMI amount to keep the tenure the same and save on the total interest paid.

What is the 'composite scheme' in the context of GST mentioned in the script?

The composite scheme is a GST arrangement for businesses with a certain turnover threshold, allowing them to pay a flat fee based on turnover instead of calculating taxes on each transaction.

Why should a business registered under the composite scheme not charge customers GST?

A business under the composite scheme should not charge customers GST because they pay a flat fee based on turnover and are not required to calculate and collect GST from customers.

How can one verify if a business is registered under the composite GST scheme?

One can verify by searching the business's GSTIN or legal name on the official GST portal and checking if it is listed as a composition taxpayer.

What is the final tip given in the script for saving money on an ice cream order?

The final tip is to ensure that the premium account checkbox is selected during the order process to avoid delivery fees and save money.

Outlines

00:00

💳 Credit Card Discussion and RBI Advice

In this paragraph, a conversation unfolds about a new credit card offering with zero annual charges, including cash back and discounts. The speaker expresses excitement about the card's benefits and the lack of fees. A friend advises getting the offer in writing to avoid potential hidden charges. They discuss the possibility of disputing any unexpected fees with the bank or the Reserve Bank of India through their 'Ombudsman' portal. The paragraph concludes with a humorous note about seeking more money-saving tips throughout the day.

05:01

🍽️ Restaurant Charges and GST Insight

The second paragraph delves into a discussion about unexpected service charges and GST at a restaurant. The characters debate whether to pay the service charge, considering the waiter's good service despite the cold beverage issue. They explore the concept of the composite scheme under GST, which allows certain businesses to pay a flat fee instead of charging customers GST. The paragraph highlights how being knowledgeable about tax schemes can help avoid unnecessary payments and ends with a light-hearted comment about securing new clients.

10:02

🏦 Bank Account Closure and Repo Rate Impact

This paragraph covers a scenario where a bank account has become inoperative due to inactivity and the bank has charged a penalty. The characters discuss the rules set by the RBI that prohibit banks from charging fees on inactive accounts. They also touch upon the increase in repo rate by the RBI and its implications on loan tenures and interest payments. The speaker suggests that instead of allowing the bank to extend the loan tenure, one should opt to increase the EMI to keep the tenure the same and save on interest in the long run.

🍦 Ice Cream Order and Premium Account Benefits

The final paragraph features a casual conversation about ordering ice cream, with a twist on saving money. The characters discuss the process of ordering and the use of a premium account for free delivery. They uncover a 'dark UX pattern' where a checkbox needs to be selected to waive delivery fees, which leads to a discussion on the importance of being vigilant about such patterns to save money. The paragraph ends with a call to action for viewers to share their unique money-saving tips.

Keywords

💡Credit Card

A credit card is a payment card issued by financial institutions to cardholders, allowing them to borrow funds and pay at a later date. In the script, the theme of credit cards is introduced with the mention of a new card offering 'zero annual charges,' which is a significant selling point as it implies no annual fee for maintaining the card, as confirmed in the dialogue.

💡Cash Back

Cash back refers to a type of reward where consumers receive a percentage of their purchase price returned to them in cash. In the script, the new credit card is promoted as offering cash back, which is a common incentive to encourage spending and is part of the financial benefits discussed.

💡Discounts

Discounts are reductions in the price of a product or service. The script mentions that the new credit card comes with discounts, which is a common promotional strategy to attract customers by offering them savings on purchases.

💡Annual Fees

Annual fees are charges that credit card issuers require cardholders to pay each year to maintain the card. The script emphasizes the absence of annual fees for the new credit card, which is a key selling point as it means cardholders won't incur yearly charges.

💡Charges

Charges in the context of the script refer to any fees or costs associated with using a credit card or banking services. The discussion about 'no charges' and the concern about potential hidden fees highlight the importance of understanding the true cost of financial products.

💡Written Agreement

A written agreement is a documented contract or confirmation of terms between parties. The script advises getting assurances in writing to avoid disputes over fees, illustrating the importance of having a tangible record of promises made during a transaction.

💡RBI (Reserve Bank of India)

The Reserve Bank of India is the central banking institution of India, which regulates financial entities and handles monetary policy. The script mentions the RBI in the context of lodging complaints through their 'ombudsman' portal, indicating a recourse for customers with unresolved banking issues.

💡Inoperative Account

An inoperative account is one that has had no activity, such as deposits or withdrawals, for a specified period. The script explains that banks cannot charge fees for an account deemed inoperative, which is a rule clarified to prevent unnecessary charges.

💡Repo Rate

The repo rate is the interest rate at which the RBI lends money to commercial banks. In the script, the increase in the repo rate is discussed as a factor that could affect loan interest rates, impacting the cost of borrowing for consumers.

💡EMI (Equated Monthly Installment)

EMI refers to the fixed monthly amount paid by borrowers to repay a loan. The script discusses how an increase in the repo rate could lead to an increase in the loan tenure instead of the EMI, which has implications for the total interest paid over the life of the loan.

💡GST (Goods and Services Tax)

GST is a value-added tax levied on most goods and services sold for domestic consumption. The script touches on the topic of GST being charged by a business and how customers can verify if the business is exempt from charging GST under the composite scheme, illustrating the complexity of tax regulations.

Highlights

Introduction of a new credit card with zero annual charges.

Cash back, discounts, and offers as part of the credit card promotion.

Confirmation of no annual fees for the new credit card.

Customer's decision to get the new credit card immediately.

Request for written confirmation to avoid hidden charges.

Advice on using written communication as proof against potential charges.

Mention of the 'ombudsman' portal by RBI for customer complaints.

Strategy to reverse unwanted charges with written proof.

Discussion on the closure of an unused bank account and associated penalties.

Clarification that banks cannot charge fees for inoperative accounts.

The importance of checking the RBI circular for bank fee regulations.

Negotiation to remove service charges and understanding GST implications.

Explanation of the composite scheme for GST and its impact on customers.

Advice on how to check if a business is registered under the composite scheme.

The impact of RBI's repo rate increase on existing loans and EMI calculations.

Strategic approach to handle loan tenure and EMI adjustments to save money.

Use of an Excel sheet to illustrate the financial impact of loan tenure changes.

Discussion on premium accounts and avoiding delivery fees for online orders.

Final highlight on using a checkbox to save money on delivery fees.

Transcripts

Hello.

Hi Abhishek sir.

Yes.

We have launched a new credit card with zero annual charges.

Seriously?

You will get cash back, discounts and so many offers, sir.

And that too absolutely free. No annual fees?

Are you sure?

Confirmed.

I will get it. I will get it.

Just 1 second, I want this!

Just get it done.

Yeah.

Yes sir.

What was that?

I was getting a credit card.

You've been wanting a credit card from a while, right?

Yes, yes.

No annual fees.

And any other charge?

No, I think he mentioned no charges.

No, there will be some charges.

He said zero.

He said zero on joining fees.

He said Zero on annual charges.

Okay.

It's just card with a good one.

We gotta go.

But can you do something?

Can you ask that guy, whoever called you?

To give this in writing.

Written, written, written.

Because what happens is they can say that there are no charges.

And eventually one day you will check your card and there will be your fees

and you will say, the guy told me.

Now what's the proof?

The guy told you that?

Zero.

What's the proof?

Phone call.

No, where?

So get it in writing.

And then you actually know there are no fees.

So usually this happens.

Someone calls you and says there are zero charges.

And eventually you find a fee and you don't know what to do with it.

So I will call him.

No, so you won't be able to call that guy.

What you need to do is you need to tell them that.

Hey, this is an email I got before I opened an account with you for this credit card.

These charges will not be charged.

And they were.

So please reverse the charges.

In most cases they should reverse the charge.

Will help me because I have got that written already.

Correct.

In written.

In case they don't reply and say you've been charged now, then what will you do?

Police complaint?

No, no.

You can actually go to the RBI.

RBI?

Reserve bank of India, sir!

They have this portal named as 'ombudsman' a place you can complain.

They solve customer issues.

Yeah, customer issues.

So you go over there within 31 days.

If the bank doesn't solve the issue.

I'll write that then also the email will come in handy that look, I was promised this and they charged this.

So that's wrong!

Cool.

I saved you some money.

Now we go and work.

I am just writing it.

Okay. Yeah, yeah, we are working.

We have to go to meeting the client.

Cool, so we have to go.

Yes, we have to meet the client.

Yes, cool!

Get my bag.

1 minute later.

Okay, perfect.

So guys, it's very difficult to get some advices out of sir these days.

And specially about saving money.

So here's what I'll do.

I'll be with him all day and secretly I'll just get some more tips to save money so that me and you will be rich for sure.

Let's do it.

Cool.

Sir, we'll have to make a quick stop at the bank.

At the bank?

Why?

Sir, I had this different account, another account basically

and I'm not using it anymore so I have to get it closed.

But I think the bank has charged me some penalty.

I'll have to check.

Penalty?

I have missed my average monthly balance or something.

Oh yeah, that you'll have to pay.

How long have you been using this account?

For many years.

But I think from past two years I have not been using this.

Oh, so you've not received any money in it also you've not transacted also?

No, no, no.

And they've charged you money for it because I have missed some average monthly balance.

I had to do the process.

Closure process.

That fine is actually normal.

But if it's an inoperative account,

that means if you haven't used an account where debit & credit didn't happen for two years, it's deemed inoperative.

And if you've not used the account, actually the bank cannot charge you a fee for it.

but the bank manager, I mean my relationship manager called me and he told me that I have to pay.

See? No, no, no.

Not at all.

That's not what the rule says.

The rule says for an inoperative account you do not pay the fees so you can close the account and all that.

Make sure there's no debit credit in the last two years.

It's then deemed inoperative.

You don't pay any charges for this dude.

So we'll go to the bank.

I can't help you.

But you tell him not to.

But if he says no then, what will I do?

Show him this circular RBI has made it very clear that their stance on this is very clear.

They can't charge you on.

It's mandatory for them to cut this out?

Yeah, if you show it to them, they'll agree.

I think someone would have missed.

So saved some money, didn't you?

Cool. You've got the presentation ready, right? All set.

In slide 5 you have to change the stats.

It's ready.

We'll get the client.

I'll put the bag in the car.

Yeah, yeah.

2 hours later cool.

Thank you so much.

I look forward to your email.

Thank you. Thank you.

Thanks.

We'll get the cheque?

Yes!

Cheque

You are paying now?

Of course I'm paying.

Cool.

Thank you, thank you.

I will get this packed

But everything's fine, right?

Yeah!

Sir we have two extra charges.

See?

Service charge and GST.

We will have to give the GST but can remove the service charge.

Yeah, that's right.

You can actually remove service charge, but no, no, 1 minute.

You'd changed this coke four times, right?

It's not cold!

It's not cold!

And he helped us with a smile.

So I think you can remove it.

But it was not cold to be honest.

But also I'm paying.

We should keep it.

You can remove it, but this GST.

I think you are a little right about that.

You know what?

What are you doing, sir?

We have to make the payment.

Yeah, 1 minute.

Oh, perfect.

I knew it.

We don't actually have to pay GST on this.

Right?

Let's get this reduced.

But why?

Because there are two types of people who pay GST.

One is like the normal GST payer and the second is under the composite scheme.

Composite scheme?

Composite scheme.

Any restaurant or company having a certain turnover, which is a little low than the government has prescribed,

they can just pay a flat fee based on the turnover.

They won't have to calculate all of this.

So it's a little easier for them to file taxes.

So we can check that right now?

Yeah.

So actually, if you open this website, this is the official GST portal.

So over here, click on search taxpayer and search for a composition taxpayer.

That's the person we're looking for, the composition.

The cafe's name?

Yeah.

If you're registered under composite scheme, you have a different way.

You're paying taxes so you don't have to charge the customer GST.

The GST should not be there.

oh, they are robbing us.

No no not robbing.

I mean they did not tell us about this & charged us.

Over here.

If you search and you can put in the person's GSTIN, you can find this on the bill.

Here is the GST number We put this in, you click on search, put in the captcha and you'll get it.

In case you don't have this, you can even put the official name, you know, blah blah blah, blah, private Limited.

You can put that legal name also.

Sir this process will take up too much of our time.

Once you hit search and you found that legal entity here, that means he's registered under the composite scheme.

So we don't have to pay the GST then?

No, but if you don't find it, most large businesses will be paying regular taxes, so they will charge you GST.

But a small business is likely to be in this, so these guys should not be charging.

I'll get the payment.

Yeah.

Good job.

Yes. Good.

This is nice. I'm very excited.

We'll have it.

We'll have them on board.

Cool. Do we.

The second meeting is cancelled, no?

So we'll go straight to office?

Yes. Okay.

We'll have to do a couple of.

I was thinking.

Shit. Yaaaar.

Sir, what happened?

The RBI has increased the repo rate.

You know what will happen now?

So the loan that I have now?

Yeah! The interest will get increased now.

What have you opted for?

I mean opted for like what's your option?

What did you take?

Did you increase the loan tenure the number of months?

There is no option.

The bank just increased the interest.

No no, that's not how it works.

So once repo rate goes up so what will happen is to keep your EMI the same

the bank will actually increase the number of months.

So the loan tenure will increase.

Okay.

And once that happens your EMI will stay the same.

But you know there's a problem in that.

Let me show you. Actually 1 minute.

Let me park the car.

This is actually pretty interesting.

You know we keep saying invest in the stock market you will get 12% returns per year.

Over a year you'll make crores of rupees over 20 years.

Correct. Correct.

That's compounding right?

Imagine the same thing.

But the bank is doing it to you.

So if they increase the loan tenure then what happens?

You'll pay more interest.

I have an excel sheet on this.

Let me show you.

So imagine this.

You have excel sheet for everything?

Yes that's right.

But let's suppose that this is an example.

I'll take a bigger loan.

Let's suppose it's a home loan.

50 lakhs.

Okay.

Now over here.

This is the current EMI.

Now what will happen is let's suppose the home rates increase by this much.

Okay.

You'll see that if the bank adds about 15 months extra?

Extra, that's about four years to the tenure.

Your Emi remains the same.

But the interest goes up by a lot. So how much?

How much am I paying?

I mean lakhs of rupees extra.

So it's better that instead of this if you look at the other sheet when this happens just tell your bank.

Don't increase the tenure.

Just increase the EMI & keep the tenure same.

And you pay a few thousand rupees more.

But you don't pay that much interest.

Don't increase the tenure but keep the EMIs same.

No no don't increase the tenure, increase your number of EMIs increase the number of EMIs.

Not number of EMIs.

The amount if you pay.

So if you're paying 37,000 before now you pay 40,000 or whatever.

It'll depend on what.

But in this example you'll notice that the EMI went up.

The tenure is the same.

You don't pay that extra interest.

So you save lakhs and lakhs of money.

And I don't think anyone follows it.

That's why I asked.

What did you choose? Oh.

So I have an option.

Another way to save money, sir. Thank you, sir.

No problem.

Cool. We almost there?

Yes, at the office.

I think you should prepare for the next client meeting.

So you should review slide number 21.

Of this presentation?

Yeah.

And we just change it for the next one.

Yeah, yeah, yeah.

I have your bag, acha.

Thank you.

Okay.

It's a long day.

Do we have anything left?

No, sir.

Back to home.

Actually, you know.

How about an ice cream?

Okay. You'll have vanilla, chocolate.

Oh, chocolate.

I'll have vanilla.

Is the flavor fine?

Yup.

It'll be in 15 minutes.

Cool.

So I'll just place this order.

What are you doing?

You want a different flavor?

No, no.

Your next steps.

I'll click this button.

OTP will come and it'll be here in 15 minutes.

Sir, don't you think you can save money here?

I am not not ordering a vanilla for myself.

No, I can't.

I'll come here.

No, you see.

You see this checkbox?

Okay, I'll just click this.

What happened to the final price?

See Rs 30 reduced from the final price.

What is that?

Was that a discount coupon?

Delivery fees.

That's how you can.

No, no, no.

I have a premium account so all my delivery is free.

It's a premium account.

You have to click on this checkbox to ensure the delivery fees is reduced from the final price.

That's really messed up.

That's how you can save money.

Dark UX pattern.

Aha. Fancy term.

Very bad order, sir.

Okay.

Thanks for saving Rs. 30!

Of course.

So now you tell me some of the unique ways that you have saved money in the comments below.

And I'll see you in the next episode.

We'll see you in the next episode.

Order done?

Who are you talking to?

Oh, I am just.

No no nothing!

Order!