Package fees

Package fees are fees that are offered for a bundle (or “package”) of services from a bank.  They tend to supplant annual fees charged for individual services that include not just credit cards but also mortgages, current accounts and personal loans.  So if a bank customer were to pay a package fee then they would not need to pay any of the individual services.

Package fees tend to be higher than the individual fees for a service, such as the annual or monthly credit card fee, but when more than one service is taken up they can work out considerably cheaper.  Many of the best credit card and mortgage accounts have some of the highest fees and so if a consumer wants to pay for a high level of service then a package fee may be a way of keeping those costs in check.

Package fees allow a considerable amount of cross selling to the bank of investment type services such as savings accounts which often do not attract fees.

A customer who has a large number of accounts with a single financial provider will prove to be more important to the bank as losing the account holder’s custom could mean a significant loss of revenue.  It is also easier to carry out tasks such as paying off the balance of a credit card every month from a transaction account.  However having all financial services under one roof can also means that the bank can become more complacent as the costs of moving the account in time, convenience and money become higher.

If choosing a package fee provider it is a good thing to remember that the majority of the account holder’s banking and financial dealings will be with this bank, and this is likely to continue for a long time due to the inconvenience of moving an account.  It is a good idea to make sure that the bank is a big provider with a wide range of services as the bank needs to be able to provide future services and not just currently needed services.  It is also a good idea to make sure that the bank either has a reputation for good customer service or preferably has demonstrated consistently good customer service to the client.

There can be restrictions as to which services are covered by the package fees.  These may not be necessary services, but they should still be checked.