‘NAB has repeatedly nabbed positive press by being the first to slash fees. This forced competitors to follow suit.’Feel free to bust out a little happy dance: Aussie consumers came that little bit closer last week to being able to reclaim more than $220 million in bank ”exception” fees.
You know, fees for things like going overdrawn, bouncing a cheque or missing repayments.
Almost 200,000 consumers have joined a class action against eight banks arguing fees of $25 and even greater for such transgressions were excessive and tantamount to profiteering. The latest victory came courtesy of the High Court, in a test case against ANZ, which cleared the way by ruling the fees could be considered “penalties”.
The next step is to prove they’re excessive in comparison to the costs the breaches create.
And it’s somewhat incriminating that most institutions dropped them like a hot potato when the legal challenge – and controversy – started. Overdraft fees are typical of the cuts, moving from an average $30 to $10 (most late payment fees remain about $25).
In the meantime, perhaps in a bid to replace lost revenue, banks are raking in enormous amounts of money from different fees and dubious product pricing.
Here are the new clawbacks you need to combat.
NAB has repeatedly nabbed positive press by being the first to slash fees – and it was the first to abolish transaction fees, too.
This forced competitors to follow suit such that fee-free banking is now a reality. So if you’re still paying a monthly fee for an all-you-can-eat-style transaction account, where all your transactions are free, you’re donating money to your bank.
Be aware though that the new, improved breed of transaction account still comes with pitiful interest rates so should be used for your short-term deposit and living expenses only.
I was heartened recently to learn we’ve changed our withdrawal ways. So-called foreign-ATM fees – where you are now charged an average $2.50 for accessing your own money through a bank that’s not your own – have us so irked that we are actually walking further to our own ”hole in the wall”.
While 50 per cent of all ATM transactions were made at foreign ATMs before an explicit fee opt-in at the terminal was introduced in 2009, the Reserve Bank says by 2011 that had fallen to 40 per cent.
Apparently the reform got many of us pushing the ”cancel” button. But that’s still an annual outlay RateCity estimates at $660 million so we could do more. One of the cheapest ways to get cash is through eftpos when you make purchases.
Conduct serious research before going overseas though as often the charges for getting at your money – even credit – are astronomical. Look for partner institutions, cards that charge no or low international transaction fees, or converting your cash cheaply in Australia and risk it.
THE RATE WAIT
We are all on the edge of our seats now as we await the banks reaction to each official rate move. Much of the focus is logically on mortgages as this is often our biggest investment and largest debt: will rates fall by less than a cut, increase by more than a hike, or move entirely of their own accord?
Well, the same pricing shenanigans happen with savings accounts and credit cards, and on the latter the hoarding is horrendous. Recent research by Mozo shows credit card holders received only one-third of the cuts passed on to mortgage holders since the credit crack-up.
Your best comeback here is to never pay interest; to clear your card at the end of every month and use it for convenience only. Pay down that mortgage, too.
Be aware also that banks make and keep a fortune by delaying the start date of any rate changes, as well as the date on which they increase loan direct debits in particular.
It’s a little bit less in each of our pockets and a lot more in theirs so monitor your liabilities.
Much has been written about the comparatively high savings rates we are being promised as banks seek to secure our deposits and shore up their funding base. But they’ve also made it much harder to actually get them.
Enticing savings-account rates are valid either for very short periods or come with qualification conditions that mean you might never get them. No withdrawals; minimum monthly deposits; blue moons – or all three.
You need to strive to meet these, but if there’s the chance you won’t, sign up only to savings accounts with a high base rate – in other words, the rate you’ll get under any circumstances.
Nicole Pedersen-McKinnon is the editor of afrsmartinvestor南京夜网.
Follow her on Twitter @NicolePedMcK.
This story Administrator ready to work first appeared on Nanjing Night Net.