Nothing in life is free, including with your bank, and while regulations are in place to protect Australian consumers, there are still plenty of ways you could be slashing your banking costs.
The Future of Financial Advice Regulations have been praised by the Australian Bankers’ Association (ABA) as providing favourable banking conditions for consumers nationwide.
“[T]he FOFA Regulations enable consumers to continue to do their banking in simple, easy and low cost ways. Banks can continue to provide free, simple and general advice across banking channels as they do now, and as customers expect,” explained Steven Münchenberg, ABA Chief Executive.
The FOFA scheme was voluntary from July 1 2012 and mandatory exactly a year later. It’s now a benchmark to ensure Australians receive affordable, high-quality financial advice. However, financial advice is just one aspect of banks’ dealings. What about the fees and charges customers are paying for their accounts and credit cards?
Watch your spending
Do you quiver at the knees when you hear the word “Louboutins”? Perhaps the sound of a purring motorbike makes your heart sing instead or you’re a fan of fine dining.
Everyone has their spending weaknesses, whether it’s a pair of new shoes or vehicle accessories, however, failing to budget can hit your pocket in more than one way.
Obviously, you need to purchase the item itself but if you’re using credit cards to splurge and go over your credit limit, you could be stung with fees. Likewise, if you overdraw your account, you may see a penalty fee land on your monthly statement.
Always look at your monthly statements and raise any discrepancies with your bank.
Get direct about those automatic payments
Setting up direct debits or automatic payments can be liberating — rather than manually paying rent, power bills and internet payments, you can instead take a set-and-forget approach.
But beware, automatic payments and direct debits aren’t all that. If your pay cycle doesn’t line up with payments or your transactional balance is a little short, you could be hit with penalty fees.
Set up a spreadsheet to keep track of your scheduled payments, and check them against your salary cycles. If it looks like a payment is going to run foul, you can hold it before it does, saving yourself an annoying extra charge.
Compare the options
If you feel like you’re getting a poor deal with your bank, don’t hesitate to compare its term deposit, credit card and account fees against competitors.
There’s no point sticking with a bank purely for the sake of it, if you could otherwise be saving hard-earned dollars in the long run. If low fees are what you want, head into your local branch and see if you can switch to a low- or no-fee transaction account.
Take evidence of other banks’ offers — if your current bank won’t offer a better deal, vote with your feet.