There is no way of avoiding bank fees but you can certainly keep them at a minimum if you spend, save and pay smart.
Each year banks earn billions of dollars from household bank fees. The amount banks receive from household bank fees is money paid by households for fees charged on their financial products such as home loans, credit cards and personal loans.
The good news is, the Reserve Bank of Australia (RBA) reported the amount of household bank fees has been declining significantly since 2010. The decline in home loan fees has been occurring despite a 5 percent increase in mortgage lending in 2012. The RBA suspects this is due to many banks waiving their application fees and other fees, as well as the Federal government’s ban on exit fees for variable rate home loans in July 2011.
But despite the decline the Australian Banker’s Association reported that Australian banks still collected $11.3 billion in bank fees from households and businesses over 2012, with the average Australian household currently paying $8.94 per week in bank fees.
With home loans, transaction accounts and credit cards making up 90 per cent of household bank fees, Australian’s need to be savvy when it comes to reducing outgoing costs.
Tips for keeping your bank fees to a minimum
- Shine a magnifying glass over your bank statements to ascertain where your fees are coming from.
- Get organised: Avoid unnecessary and pricey late fees, ATM and overdrawn accounts fees.
- Shop around for a better home loan or credit card deal: Look for ones with no monthly fees.
- In most cases, the more features the higher the fees so work out if you really benefit from all the features or could go without them for smaller fees.
- When applying for a home loan, make sure that you read the product disclosure statement (PDS) so that you are aware of all the fees and charges.