The most despised bank fee revealed and how to avoid it
Some banks are hitting customers with whopping fees just to keep their accounts open. Find out who the worst offenders are here and how to make the switch to fee-free.
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Banks are hitting customers with fees of up to $10 per month just to keep their account open.
Exclusive polling of 2000 Australians shows monthly account-keeping fees were the most despised fee for 20 per cent of respondents — second only to print your own concert ticket charges. Other loathsome fees included the added cost of paying by credit card.
Fees remain a cash cow for financial institutions, with the latest Reserve Bank of Australia data revealing ticket-clipping reaped $13 billion in 2017, up $450 million on the previous year. About $4.5 billion of this total was paid by households and the rest by businesses.
Fees from credit cards were the biggest winner for banks.
Annual fees on credit cards in 2017 rose 7.3 per cent to an average of $147.
The RBA also found account-servicing fee income jumped, “with some banks reinstating annual fees for products where these fees had previously been waived”.
Financial comparison website Mozo’s spokeswoman Kirsty Lamont urged consumers who hate paying account fees “to take matters into your own hands.”
“Go get yourself an account where you can avoid them altogether,” she said.
“There are 64 accounts on the market that have no monthly account fees and no additions attached, you don’t have to do anything to pay zero fees.”
MORE FEE FIGHTER STORIES:
Concert ticket fees that are ripping you off
How to avoid hidden cinema fee charges
Mozo analysis found the highest monthly account-keeping fee was charged by National Australia Bank for its Classic Banking Account that has a platinum debit card attached.
University student Mariah Black, 19, works casually as a waitress and pays $5 per month for a daily transaction account with ANZ.
She said she is looking to switch banks to avoid the charge.
“It all adds up, I only noticed recently about the fee when I read my monthly bank statement,” Ms Black said.
“It annoys me, I want to suss out changing because it annoys me, it’s a rip off.”
NAB’s executive general manager of deposits and transaction services Shane Conway said the card offered extra bonuses for customers.
This included waiving foreign currency fees on international purchases and it offers seven complimentary insurance including travel cover.
“We want to ensure our customers have the products and services that suit their individual needs which is why we discuss the options with our customers when they visit us in branch or contact us via phone,” Mr Conway said.
The Australian Securities and Investments Commission’s Moneysmart’s senior executive leader Laura Higgins also encourage people to take control of their finances and avoid fees whenever they could, particularly on their everyday banking.
“If you’re sick of paying monthly account-keeping fees switch to an account that doesn’t charge them,” she said.
“If you are switching bank accounts only close your old account once you have transferred your direct debits and credits.
“It is wise to also notify all your merchants of your new account number.”
Mozo data found the average monthly account-keeping fee is about $5.30, but many accounts allow customers to avoid any charges if they could meet a set criteria.
There are also 73 everyday transaction account with zero monthly account-keeping fees on the market that do not require a minimum deposit.
If you want to switch transaction accounts ask your old bank to provide you with a 13-month list of all your direct debits and credits.
Your new bank can help you move these across.
Other bank account fees people that could be avoided include ATM fees, annual fees on credit cards and home loans and mortgage application fees.
Top 5 fee-free day-to-day transaction accounts
1. ING Orange Everyday
2. Macquarie transaction account
3. Citi Plus transaction account
4. UBank Ultra transaction account
5. Up everyday banking account
Source: Mozo.com.au
Note: All accounts are fee free and do not charge international transaction or international ATM fees, except Up which charges a $5 international ATM fee. Some accounts require minimum deposits each month.
Originally published as The most despised bank fee revealed and how to avoid it
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