The use of credit cards or even knowledge about existence and mechanism, advantages or disadvantages of such services is limited in our banking services market. By contrast debit cards are widespread and still more popular. Therefore also the offer of credit and debit cards is uneven, with probably every bank offering a very similar range of domestic or foreign debit cards and only a handful of them offering credit cards. The following banks or financial companies offer credit card services: Cetelem, Tatra Banka, Slovenska Sporitelna, UniBanka, HVB-Bank Slovakia and Diners Club.
In my research I have focused on two banks with broadest level of services concerning credit cards-Tatra Banka and HVB-Bank and one non-banking subject Cetelem that has consumer credit services as its core business activity. I omitted the debit cards, for it would outreach the required length. And credit cards as an unknown for me were my dominant interest.
HVB-Bank Slovakia The first bank in my selection is HVB-Bank Slovakia. It offers two series of credit cards with cooperation with two premier payment brands, Visa and Diners Club International. The VISA Classic and VISA Gold credit cards are designed for foreign and also for domestic usage. They are usable in 19 million shops and sales-points and you are able to take out money from over 600 000 ATM’s all over the world.
To get VISA ClassicGold credit card you have to meet several conditions. You must have current account at HVB-Bank, minimum monthly credit limit of SKK 155 000310 000 and fixed deposit of 1,5 multiple of your monthly credit limit. There is possibility of additive card, the card is valid for two years and you have broad insurance package included in the price of the card. The card also provides you with discounts on car-rent. HVB-Bank through this charge card provides its customers for a period of one month with an ex-interest credit. The volume of transactions will then be paid with one entry in agreed schedule. The annual fees for VISA cards range from SKK 750 to SKK 4400 depending on type of card and insurance package. The cash-takeout fee is 3% (min SKK 150) and blocking of the card costs SKK 1500.
The Diners Club International credit card is designed especially for top business travelers and demanding private clients. It is usable in over 5 million places all over the world. Similar to the VISA cards you need to have current account and a standing order from this account. Monthly credit limit starts up with SKK 80 000 and you have to pledge 1,5 multiple of monthly credit limit. Unlike the VISA cards, Diners Club International cardholders are provided with rather exclusive services. Free refreshment services in the most important business places and V.I.P saloons at the major airports. Guaranteed hotel reservations, even in the case of schedule breach and lower car-rent rates in Hertz and Avis are all included.
The second exceptional characteristic of this product is the insurance package. The annual fee provides the client with complex travel insurance provided by AIG Slovakia a.s. that refers not only to client himself but also to his travel mates and the insurance payment is up to SKK 40 million. The annual fee is SKK 5500 and SKK 2500 for additive card. Fee for cash operations is 4%, for clearing operations in foreign currency 1%. Clearing operations in domestic currency, blocking of the card and spare card are for free.
Tatra Banka TB provides credit card services on a broader level than HVB-Bank and as far as I understand, it has the widest range of credit card products in the Slovak market. TB also cooperates with Visa as the other banks do and with Diners Club International. Further it cooperates with EUROCARDMASTERCARD and American Express.
Diners Club International credit card offered by TB is very much similar to the one offered by HVB-Bank with the same conditions and terms of issue of the card, same advantages and fees. However by the offer of VISA cards we can find many more differences that may matter when deciding for particular bank or service. There are more variable conditions and terms of possessing a VISA credit card and more possible properties of the card. First, you do not have to be a client of the bank and do not need to have a current account there. The installments are optional, but at least 10% of minimum monthly credit limit and can be paid by cash deposit, money transfer, standing order, through telephone and Internet.
Furthermore, it is possible to choose between individual insurance, family insurance and no insurance .It is ex-interest when you pay-off 100% in the period of 40 days. Actual standard interest rate is 17,68% and sanction interest rate is 25%. The credit limit can be from SKK 20 000 up to SKK 200 000, by VISA Gold card SKK 200 000 and more. There is a limit of SKK 15 000 per week by cash-takeout.TB requires that you have income of at least SKK 10 000 per month and you are continuously employed for over a year to issue you a VISA Card. Annual fees range from SKK 750 to SKK 5200 depending on type of the card and insurance package. Fee for cash-takeout from ATM is 1,5% (min SKK 150), from bank 2% (min SKK 250) and for blocking of the card SKK 1000.
TB also offers an interesting additional product- virtual VISA Card. It is not a traditional plastic card and it is designed for e-commerce. You can ask for virtual VISA Card as an additive card to your standard VISA for free or you can create it as a new one. The conditions, terms and payments differ little from standard cards. American Express services offer tends to be the more exclusive one on the market. This means the advantages following membership in the American Express club, broad insurance package or unlimited loan amount. To get hand on these services, current account in TB is needed, and you have to pledge $ 5 000, 10 000 or 50 000(70 000-new client) mil for AMEX Green, Gold or Platinum credit card respectively. Entry fee is $80; annual fees vary from $ 100 to $400, cash-takeout fee is 4%, check payments are charged with 5%.
The last, and quite special credit card product is a co-branded EUROCARDMASTERCARD- MERCEDESCARD. This card is offered in cooperation with Motor-Car Wiesenthal and available only to its clients. The conditions are very much the same as with VISA Cards, as a bonus it allows the cardholders to exploit various discounts on car-related goods and services.
Cetelem The purpose of introducing this company is to indicate that the options are not restricted to banks only and specialized subjects have their place on the market. Though Cetelem itself is a part of a large financial group- BNP Paribas. Activities of this company focus in the area of consumer credit services with the main product - AURA card - a revolving credit type card. It is issued for free, with no annual fees. If you do not use it, it actually is something as an ever-ready reserve. When the card is used, the installments represent at least 5% of monthly credit limit plus 2,39% month interest rate accounted daily from unpaid amount. Other fees include 1,5% cash-takeout in abroad and SKK 100 for transfer payments to client accounts. To get this card you have to be a citizen of SR and have regular and permanent revenue.
Conclusion For picking up the winner of this paper, several aspects have to be considered. I suppose it would be better to evaluate the more suitable product for each particular group of customers.The majority of the credit cards are aimed at the higher classes of society, two of them actually at the very top. For this reason, they are rather expensive to maintain and use. On the other hand they offer really exclusive, I think sometimes even unnecessary, services to attract their top clients. From this category, I would pick the Diners Club International as the better choice for cost/value reasons.
Both banks offer it at pretty equal conditions. If I were to choose VSA Cards I would probably prefer the Tatra Banka against the HVB-Bank. For TB offers broader, more flexible and variable options with it VISA Cards and additionally an interesting virtual VISA. AURA Card- product of Cetelem can be a relatively low-cost and smart option available also to middle or lower-middle classes that want to have money at hand.