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Reduce your bank fees

Trim your bank fees

We all need and use financial products – everything from everyday bank accounts to credit cards. And with some smart strategies it’s possible to trim the fees you pay.

Many regular account fees can be kept to a minimum simply by shopping around and finding the account that best suits your style of banking.

However you may also be charged ‘exception’ fees’ – sometimes termed ‘penalty’ fees. These sorts of fees can be avoided altogether simply by knowing the types of events that could trigger an exception fee. Take a look through the terms and conditions applicable to the financial products you use for a complete picture of the types of exception fees involved.

Cutting the cost of everyday accounts

No one likes paying bank fees but a few simple steps can mean big savings on the charges you pay.

Reducing regular account fees

The steps outlined below can help to reduce the cost of your everyday bank accounts.

Match your account to your style of banking

Knowing your own banking style will help you determine the account that is best suited to your needs. Check to see which sort of account user you are:

Low account user – If you access your account infrequently, less than once or twice a week, consider a fee-free account offering a limited number of transactions each month.
High account user – If you access your account frequently - ten times or more each month - you may be able to save on fees by opting for an account charging a flat fee for unlimited transactions.

Bank electronically

Banking electronically – using ATMs, EFTPOS and the internet is far cheaper than using an over the counter service. Some banks do not charge at all for electronic transactions made within Australia.

Using an ATM while travelling outside Australia

Using an ATM belonging to another bank can mean paying excess ATM fees. Always look for an ATM belonging to your bank or an affiliated network. (Card Services customers can use any ATM in Australia fee free.)

Get two transactions for the price of one

Getting cash out at the same time you’re paying for goods using EFTPOS is a budget-friendly way to transact. The two transactions are only counted as one by your bank, so you pay a single fee instead of two.

Avoiding exception fees

With good money management, exception fees are avoidable.

Your bank will set out any exception fees in the terms and conditions for the financial products it offers. Always read this information to ensure you are aware of the sort of events that can result in a fee being imposed. Below are some common events that can trigger exception fees – along with ways to avoid them.

Insufficient funds to cover a payment

Holding insufficient funds in your account to meet a direct debit or a cheque payment can result in a ‘dishonour’ fee. There are some easy ways to avoid this:

Manage your money with a budget and plan your spending.
Keep track of the funds held in your account and schedule direct debits for days immediately following the arrival of your wage or salary into your bank account.
Ask that cheques be presented promptly to further avoid the risk of having insufficient funds in your account when the cheque is presented.
Maintain a small balance in your everyday account to cover unexpected payments.
Contact creditors before a direct debit is due if you think your account may have insufficient funds to meet the payment.
Always check your account balance before withdrawing large sums of cash or making a large purchase using EFTPOS.
Review your bank statements regularly for unauthorised transactions.
Never hand over your ATM card to another person.
Always read material sent to you from your bank. Your bank will always advise you in writing of any changes to fees and charges.

Overdrawing your account

Withdrawing more funds than you have available can result in an unauthorised overdraft fee. To avoid this type of charge:

Check your account balance regularly by phone banking or over the internet. You may also check the balance through an ATM, but be aware that some banks may charge for this. (Card Services does not.)
Allow several business days for cheques deposited to your account to clear before the funds become available. Check that the funds have been cleared before trying to draw against them.
Limit your transactions. Making repeated withdrawals from your account makes it harder to keep track of the balance – and it can mean paying additional account-keeping charges.

Cutting the cost of credit cards

Credit cards can involve a number of fees – some of which relate to the provision of the card (for example annual card fees) and some of which relate to the way you manage it (exception fees). Having a clear idea of what you want from your credit card can help you reduce card fees. Staying on top of your card spending will help reduce the risk of incurring an exception fee.

How to reduce card fees

Shopping around for a good deal will help you get value for your credit card.

Not all credit cards charge annual fees though as a general rule, the cheaper the card, the fewer features the card will offer. Paying an annual card fee can entitle the cardholder to extras like free or discounted travel insurance. However always read the fine print to discover whether or not you will benefit from paying annual card fees.

Ways to avoid exception fees

With sensible management of your credit card spending and repayments, it is possible to avoid exception fees altogether.

Always read the terms and conditions of your credit card to understand what sort of fees you may be charged.

Over the limit fees

Exceeding your specified credit limit may result in a fee being charged. Do note, your card may still be accepted by merchants even when you have exceeded your limit, so it is up to you, the cardholder, to be aware of your outstanding credit balance.

You should receive a monthly credit card statement in the mail –always review this to ensure the transactions that appear on it have been authorised by you. While this statement will give you an idea of how much you owe on your credit card, a more up to date balance should be available over the internet. Check this regularly, or whenever you are unsure about your level of available credit.

Late payment fees

Your regular credit card statements will specify the repayment required on your card each month, and when the payment is due.

Failing to meet this repayment by the due date may result in a ‘late payment’ fee.

The best way to avoid this fee is simply by reviewing your statements, noting the due date and ensuring you have made the repayment by this date.

If you are making repayments over the internet, be sure you meet your bank’s cut-off time for transaction processing. It typically takes one business day for a payment to be transferred from your bank account to your credit card.

Cutting the cost of lines of credit

Lines of credit are like a personal overdraft. You have a predetermined credit limit that can be redrawn at any time. While these facilities can be extremely useful, like all forms of credit they should be used wisely – and this includes keeping fees to a minimum.

Trimming exception fees

The terms and conditions of your line of credit will explain the sorts of exception fees you could be charged. The most common fees are outlined below:

Dishonour fees

Having insufficient funds in your account to meet a regular repayment can result in a ‘dishonour fee’. Checking your account balance regularly, particularly if you make a payment by cheque, or if you anticipate a direct debit payment, will help to ensure your account has adequate funds to cover the payment.

Late payment fees

Your line of credit statement will specify the amount required to be repaid each month - and when the payment is due.

Missing this repayment date may result in a ‘late payment’ fee.

The best way to avoid this fee is simply by reviewing your statements each month, noting the due date and ensuring you make this repayment on or by the due date.