Don’t get stung by gouging bank fees

CONSUMERS are spending a giant $12.5 billion a year on banking fees, but many of them can be avoided.

While nasty charges to use foreign ATMs are among the most hated fees, annual fees on credit cards can also hit hard.

Latest figures from the Reserve Bank of Australia show cardholders spent more than $1.5 billion on credit card fees in 2015 – an increase of 2.7 per cent in 12 months.

Selecting a credit card with limited fees can be difficult when there are so many fees attached, including an annual fee, late payment fee, cash advance fee, overdrawn account fee, reward program fee, paper statement fee and credit card surcharges.

The Australian Bankers’ Association’s chief executive officer Steven Munchenberg urged all banking customers to take time to check exactly what fees they were paying on their

various banking products.

“If people have a longstanding bank account it might still pay to check if they are paying an account-keeping fee each month… 75 per cent of accounts don’t have that fee any more,’’ he said.

“Have a look at your bank statement and see what fees you are paying and talk to your bank to find why you are paying this.”

Some people, including pensioners and low-income earners, may be eligible for feefree accounts.

Canstar spokeswoman Belinda Williamson said some of the nastiest fees were monthly transaction fees and annual fees on credit cards.

But she said there are easy ways to escape most charges.

“Banks charge fees if you miss a payment on your credit card or loan, your payment fails because of insufficient funds or you go over your limit,’’ Ms Williamson said.

“Don’t let them. Set up a direct debit or pay your loan or credit card each month to avoid racking up interest charges.”

Ms Williamson said Canstar’s database showed the average annual credit card annual fee was $107, but they could be as high as $700.