Listed below are a number of everyday fees you could be paying, but are easily avoidable.
How often do you use an ATM that attracts a transaction fee? You may think that a $2.50 fee is not much, but after a while it can add up. According to RateCity.com.au, last year Australians spent $627 million on ATM transaction fees. This is an enormous waste of money for something that could be easily avoided.
To ensure you don’t get stuck, you may need to plan ahead. If you know that you will be needing cash in the near future, make an effort to find your financial institution’s ATM. There is a great app called Find My ATM, which does exactly what the name suggests. Simply enter in your preferred financial institution and it will give you directions to the closest one.
Most banking providers will have fees related to their bank accounts, but these can be avoided:
• Overdrawn fees: If you withdraw money that you do not have, your bank will charge you an overdrawn fee. This amount will vary from bank to bank. In order to avoid this, you will need to plan ahead. If you have direct debit payments coming out of your account each month, make sure you have enough in the account. This may require saving up a buffer or you could schedule your direct debits after your salary is paid to ensure there is plenty of money available.
• Administration fees: You may not realise it, but your bank could charge a monthly fee called an 'administration fee'. Over 12 months this amount could add up, especially when there are a number of banks who do not have this fee. Shop around and see what the other banks are offering, you may even be able to negotiate with your current bank to get rid of these fees in order to keep you as a customer.
Credit card fees
There are a number of fees that you could be charged for your credit card beyond just the interest:
• Surcharge: Some retailers will charge a surcharge for certain credit card companies (Visa, Mastercard, American Express). Different retailers will charge a different amount, but it will usually be around 2-3%, which can add up if it is a large purchase. Retailers are meant to advise you before the transaction, but to be safe, make sure you ask beforehand whether there is a surcharge. If there is, you may want to consider using an alternative method.
• Overlimit fees: You may have found in the past that your payment has gone through on your credit card, even if you do not have enough credit available. If this happens, your bank will charge you an overlimit fee. In order to avoid this, make sure you have a clear idea about how much is available on your credit card before using it.
• Late payment fee: Like most credit providers, if you do not meet your minimum repayment by the due date, you will most likely be charged a late fee. This is completely avoidable, it is just about getting organised. Set up a reminder a few days before your bill is due or set up a direct debit each month, so you don't have to worry about remembering it.
Home loan fees
When it comes to home loans, there are some fees that are unavoidable, but there are also fees that you do not need to be paying:
• Missed repayment fee: Missed repayment fees are not cheap when it comes to home loans. Lenders will usually charge between $30-$60 for each missed repayment and this could also have a negative effect on your credit report as each missed repayment could be listed as a default. This can be avoided by paying attention to when your repayments are due and ensuring there is enough money in your account. Many borrowers line up their repayments with when they get paid. This way, your mortgage is taken care of before your money is put towards other bills and expenses.
• Home loan increase: Some borrowers apply for a home loan increase in order to fund a large expense such as a new car, motorbike or renovation. However, there are fees involved, not to mention more paperwork. If you are thinking about increasing your home loan amount, you may want to consider refinancing at the same time. You may find that there are more competitive home loans available and you can use this opportunity to find a home loan that may better suit your needs. Similarly, if you are looking to finance, look 6-12 months down the track. Will there be any major expenses that you will need an increase for? By combining an increase and refinance in one, it could help you save both time and money.
State Custodians has a range of home loans with useful features to help you save. If you need help finding the right home loan you can speak to a Lending Specialist by calling 13 72 62 or leave your details here and they will contact you.