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Banks rake in $4.19 billion in fees from households
Banks charged customers an eye-watering $4.19 billion dollars in bank fees last year, according to the latest figures released from the Reserve Bank of Australia today.
RateCity.com.au analysis shows this equates to $441 per household in bank fees a year.
While the overall total fees paid by households is down from the previous year, credit card fees have clocked in at $1.71 billion – an increase of $36 million from the year before and the highest annual total on record.
The biggest drop was in fees from transaction accounts, following the scrapping of ATM fees by Australia’s major banks in late 2017. Today’s figures show a 20.4 per cent drop in transaction account fees from the year prior, a decrease of $223 million.
How much Australian households spent on bank fees in 2018
| Key categories | Spend | Change from last year |
|---|---|---|
| Credit cards | $1.71 billion | +2.2% |
| Home loans | $1.17 billion | -7.0% |
| Transaction accounts | $869 million | -20.4% |
| Personal loans | $341 million | +1.5% |
| Other deposit accounts | $42 million | -9.0% |
| Total | $4.19 billion | -6.5% |
Source: RBA domestic banking fee income 2018, released June 20, 2019
RateCity.com.au research director Sally Tindall said: “Australian households are throwing $441 a year down the drain in bank fees, despite the fact there are good, fee-free products on the market.
“People often see fees as annoying but unavoidable. That’s not necessarily true. In most cases you can escape paying fees by picking fee-free products or haggling with your bank to have them waived,” she said.
“Credit cards are the worst offender and today’s data shows the problem is growing. Firstly, the fees can climb as high as $1,200 a year and secondly, a lot of Australians have more than one card burning a hole in their pocket,” she said.
TIPS
- Call your bank and ask them to waive any fees you are paying. Arm yourself with three examples of low or fee-free products before you call.
- When shopping for a home loan, check the comparison rate of any potential home loan to give you an indication of hidden costs.
- When taking out a new loan or refinancing, ask your lender to waive any fees. Chances are they’ll want your business enough to say yes.
- If you have a rewards credit card, assess whether you are getting enough value out of the program to cover the costs of the annual fee (and any other charges you might be paying).
- Opt for a low-fee transaction account that offers ATM rebates and waives overseas transaction fees.
HOME LOANS
Around 27% of home loans have no upfront fees and around 8% of home loans on the RateCity.com.au database have no upfront or ongoing fees.
Fee-free options
| Lender | Product | Upfront fees | Ongoing fees | Ongoing variable rate |
|---|---|---|---|---|
| Macquarie Bank | Basic Home Loan | $0 | $0 | 3.44% |
| UBank | Variable Home Loan | $0 | $0 | 3.59% |
| Suncorp | Back to Basics | $0 | $0 | 3.69% |
| Westpac | Flexi First Option Home Loan | $0 | $0 | 3.78% |
CREDIT CARDS
RateCity.com.au data shows there are 28 cards with no annual fees.
Some cards with no annual fee
| Company | Product | Annual fee | Interest rate | Perks |
|---|---|---|---|---|
| American Express | Low Rate | $0 | 8.99% | Low rate |
| Coles | No Annual Fee Mastercard | $0 | 19.99% | Rewards points |
| HSBC | Premier World (Rewards Plus) | $0 | 19.99% | Rewards points |
BANK ACCOUNTS
Transaction accounts with no fees or low fees
| Company | Product | Monthly fee | Other fee waivers |
|---|---|---|---|
| ING Direct | Orange Everyday | $0 | No ATM fees in Aus or overseas. Third party ATM fees rebated. No currency conversion fees. |
| Macquarie Bank | Transaction account | $0 | No ATM fees in Australia or overseas. Third party ATM fees waived but only in Australia. No currency conversion fees. |
| ME Bank | Everyday Transaction Account | $0 | No ATM fees in Australia. Third party ATM fees waived. International fees to apply however. |
Sources: RateCity.com.au, RBA domestic banking fees income, ABS household projections.
Disclaimer
This article is over two years old, last updated on June 20, 2019. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent bank accounts articles.
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Product database updated 26 Nov, 2024
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