The Leumi credit card company is launching a new "Leumi Free" credit card which does not charge regular commissions. Among the commissions customers would be saving are membership fees, credit limit, service commission and a delayed payment commission. On the other hand, the card does not include the benefits most cards provide, including points, special offers, club memberships, travel insurance, calling cards and more.
Leumi Card officials explain that holders of other credit cards pay an average of NIS 13 a month for various commissions. In addition, many credit card holders are also charged hundreds of shekels a year because they do not meet the requirements for membership fee exemption. For instance, a Leumi International card holder who does not execute a minimum of six transactions per month is charged a membership fee of NIS 436 a year. A Leumi Free card holder will not be under an obligation for minimal activity.
"We are receiving complaints regarding credit card commissions," explains Leumi Card CEO Arye Heilweil. "We have therefore deemed it appropriate to provide the Israeli consumer with all the alternatives and leave the decision of whether to use the credit card as an instrument for payment only up to him."
A survey ordered by Leumi Card shows that about 50 percent of credit card holders do not make use of the benefits and special offers they are entitled to; 39 percent do not know what commissions they are charged for; and 62 percent do no know how much they are being charged.
The card will be issued under the Visa brand name and cards will become available to customers of all banks at the end of January. Customers will not receive printed monthly reports, but will be able to view them at the company's Web site.
Regarding this matter, Consumer Council representative Zeev Friedman explains that according to charging regulations, credit card companies must provide their customers with a monthly report listing all transactions. In line with the regulations, the report will be provided to the customer via an acceptable media of the customer's choice, offered by the company. Sources in Leumi Card say they are authorized by the Bank of Israel not to send Leumi Card Free customers a monthly report by mail.
Charging your new CashCard
In addition, Leumi Card is also launching CashCard. This is an international credit card, which is charged in advance by cash payment, or by a money transfer of up to NIS 5,000. The card costs NIS 10 a month depending on use. If the card is not used in a given month, the card holder will not be charged.
According to Heilweil, the card is intended for all those without a credit card - 25 percent of the Jewish population, and about 40 percent of the Arab, ultra-Orthodox and Russian-speaking populations. "This card is intended to be the perfect solution for over 900,000 adults, aged 18 and above, who do not hold a credit card," says Heilweil and adds that, "The fact that it is a charged card also provides a solution for people who until now were refused a credit card by the bank or by the credit card company, and also to those who have avoided using a card because they fear they will loose control of their expenses."
Card issuing will begin during March and Heilweil estimates that by the end of 2007, some 20,000 cards will have been issued.