How they slug you to use a credit card

CREDIT card customers are frittering away their money by paying unnecessary fees that can easily be avoided.

New data examining the spending habits of nearly 60,000 Australian card users across 4.1 million transactions was compiled by Pocketbook, a ZipMoney company, and found many people are getting stung.

It showed annual fees are biting hardest ($87 a year), then international transaction fees, late payment fees ($38) and cash advance fees $35.

In terms of total fee revenue, financial institutions are making the most money from slugging consumers with international transaction fees (38 per cent of total fee revenue), followed by annual fees (34 per cent), cash advance fees (9 per cent) and late payment fees (8 per cent).

ZipMoney’s chief growth officer Andy Mitchell said international transaction fees have the most exorbitant charges and consumers needed to pay attention.

“International transaction fees are incurred in one of two situations, either Australian consumers are staying at home and buying goods from overseas or consumers here are travelling overseas and using a card while over there,’’ he said.

“As a result they are incurring foreign currency conversion fees ... and some other peripheral fees they are incurring from the banks.”

Mr Mitchell urged consumers to monitor their statements and check what charges they are paying and take action if it’s too much.

“By shopping around you’ll find a way to reduce the fees that fit into your behaviour,’’ he said.

Consumer finance expert Heidi Armstrong said it’s vital card customers use their plastic wisely and are mindful of the charges they pay for the privilege of paying on credit.

“Fees can spiral out of control but so too can the interest,’’ she said.

“Before you open your statement try and guess what you are paying in fees and then compare that to the actual statement – many people might get a shock.”