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Money musings, financial commentary plus the rambling wit and
wisdom of the team from Mozo - Australia's money info zone

Sweet tooth leaves $8.83 billion hole in Aussie’s wallets

By Kylie 11 April 2012 3:50pmpersonal finance, Savings accounts

Did you know Australians spend more money each year on confectionary, cakes and biscuits than on vices like beer, cigarettes and coffee?

The average Australian household spends $1,032.20 each year or ($19.85 a week) on sweet indulgences like chocolate, lollies, cakes and biscuits. This is almost twice as much as we spend on fresh fruit (just $9.60) or vegetables ($10.79) each week. And it’s also a lot more than we spend on sporting and gym fees ($9.55) each week.

That’s a whopping $8.83 billion a year that could be put towards bulging up our bank accounts instead of our waistlines.

We’ve calculated that by giving up a few sweet indulgences, the average household could save an average $1700 in a year – that’s a new flat screen TV or family holiday to the Gold Coast.

But keep this habit going for a decade, and put the money into a high interest savings account, you could potentially have a nest egg of $23,000 –enough for a car or a house deposit. And now is a great time to get into this much healthier savings habit. Mozo’s latest data shows that banks are actively competing for deposits with higher savings rates on offer.

Top 5 savings rates include:

UBank USaver 6.01%

Rabo Direct High Interest Savings 6.01%

ANZ Online Saver 6.00%

Citibank Online Saver 6.00%

HSBC Serious Saver 5.95%

 

Source: ABS household expenditure survey 09-10

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Hey big spender: Aussie travellers give $1.4 billion tip

By Kylie 24 November 2011 5:21pmTravel MoneyTag: > > > > > >
Nothing can wipe off a holiday glow quicker than a post-holiday credit card bill or bank statement containing unexplained fees or charges. Aussie travellers are being slugged to the tune of $1.4 billion* by banks and travel money operators for the privilege of spending their money overseas Mozo has discovered.

According to Tourism Research Australia**, we’re some of the world’s biggest overseas holiday makers taking 7.1 million overseas trips in 2010 and splashing out around $5000 per trip. Depending on the travel money option you choose when holidaying, Mozo estimates you can pay as much as $315 in fees, commissions and other charges when spending $5000 abroad.***

So before you set off on your next holiday, be sure to head over to Mozo’s new travel money section and compare your options by following a few simple rules:

1. Pre-order foreign currency. It is no surprise that rates at the airport are some of the worst around. You can now pre-order foreign currency online so do this a few days before you leave and you’ll likely to get a much better rate. Also, don’t forget to factor in exchange fees. Some banks will have higher (more favourable) exchange rates but will slug you with a big fee. Use Mozo’s foreign exchange converter to compare between banks.

2. Be wary of ‘Commission free’. Many ‘commission free’ foreign exchange outlets build a profit margin into their buy and sell rates so shop around before you exchange.

3. Not all cards are created equal. Credit cards, debit cards and ATM cards are great when you’re travelling but before you whip out the plastic, you should know how much you are getting charged for the privilege.  ATM withdrawal fees can be as high as $5 per transaction and currency conversion fees as much as 3%. Some cards charge no fees such as the Citibank Plus Transaction account and the 28 Degrees Mastercard.

4. Set a travel budget. Prepaid travel cards are gaining in popularity as they allow you to lock in an exchange rate before you leave. This means that you to stick to a budget and know exactly how much you will pay for items. There are some quirks to these travel cards so check out their features carefully. Some cards charge high cross currency conversion fees and have fees for recovering any cash you didn’t spend.

5. Avoid credit card cash advances. This is hands down the worst travel money mistake you can make.  There are a handful of travel credit cards which will allow you to put the card into credit to make fee-free withdrawals but most cards will set you back with overseas cash advance fees, foreign exchange fees, and high interest from day one.

—

* Calculation based on 7.1 million trips and $195 in foreign currency fees, commissions and other charges

** Tourism Research Australia, “State of the Industry 2011″, October 2011. Average Australian spends $5,183 per overseas trip

*** Calculation based on the difference between the most cost effective and the most expensive method of spending money overseas. Analysis completed using exchange rates and fees as at 18 November 2011 and a $5000 per trip spend. Assumed spend of $3,000 on a typical credit card and 10 ATM withdrawals totalling $2,000 using a typical debit card. ATM operator fees have been excluded from this analysis.

 

 

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Up, up and away – Mozo launches Australia’s first travel money hub

By Kylie 10 November 2011 10:33amTravel MoneyTag: > > > > > > > >

Flights. Check.
Hotel. Check.
Passport. Check.
Money…
How many of us have been in the situation where we’ve spent months planning a trip to the finest detail, thrilled at saving $100 on flights, 50% off accommodation and up to 70% off next season’s fashion, only to get home to a panoramic credit card bill or lonely planet sized bank statement full of overseas ATM fees, foreign currency purchase fees and foreign exchange surcharges?

In another Mozo first, Aussie travellers can now add money comparisons to the holiday planning checklist. Launched this week Mozo’s travel money hub, helps Australians planning on travelling or online overseas shopping to compare their travel money choices .

The hub contains everything you need for money savvy travel:

Don’t get caught out with high fees and crappy exchange rates on your next holiday – jet over to the Mozo Travel Money Hub and trade in those nasty fees for an extra mango dacquiri by the pool!

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The $37.8 million question for Australia’s big banks

By Kylie 08 November 2011 3:33pmAnswers, RBA
Last week Australia’s big four banks were quick off the mark announcing they would be passing on the full Reserve Bank rate decrease (bar NAB, who only dropped its rate by .20%). This was welcome news for most homeowners and some good PR for the banks, particularly the Commonwealth Bank, which seemed to have taken heed from the massive fallout from its supersized interest rate rise last November. 

The reality is that the banks’ home loan customers will not see their interest rates drop until an average nine days after the official rate cut. The Commonwealth Bank has passed on its rate cut in record speed of just three days but its peers are not so generous. NAB took six days to pass on the cut, while new rates for ANZ and Westpac customers only come into effect from 14 November, almost two weeks after the Reserve Bank announcement.

Analysis by Mozo’s rate chasers reveals that if the Big 4 had passed on their home loan rate cuts two days after the announcement (which they managed to do in May 2010 when passing on a rate rise) borrowers would collectively pay $37.8 million less interest.

It does seem rather odd that at a time when the Occupy protest movement is front page news championing for social and economic equality, Australia’s big banks would be so blatant about gauging their customers.

Maybe there is a plausible explanation? Can anyone answer the $37.8 million question? Why does it take longer for banks to pass on rates cuts than sting customers with rate rises?

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Business banking: who’s got the biggest package?

By Kylie 23 June 2011 4:33pmBusiness BankingTag: > > > > >

When you’re setting up a small business or looking to switch banks, you’ll want two things from your financial institution: convenience and affordability. So you might think banks everywhere would be offering up competitive package deals on a suite of business products to service the time poor, cash-flow-starved start-up market. Not to mention the time-poor, expense-averse small business market looking for a better deal.

You’d be wrong.

This week we launched a business banking section on Mozo – detailing all the business loans, business credit cards and business bank accounts on offer. And we’ve been surprised to discover that of the Big Four banks only ANZ offers an online business package that rolls various products into one deal – and one monthly fee of $32 + GST. This gets you a transaction account and a range of extras such as a savings account, payment account, credit card and merchant services.

The catch is that other fees and charges may apply – for example, on terminal rental, which still attracts half the usual monthly rental fee. So by paying “one simple monthly package fee” you don’t necessarily avoid a slew of complicated monthly fees.

Westpac is happy enough to bundle services under its “Business Foundations” package, which marries a transaction account with two additional products and saves you “up to $1,100”. But again, you’re looking at a variety of different fees and charges – and you’ll have to choose between credit cards, a savings account and a business loan.

The catch this time round is that your potential discount of $1,100 is made up of savings such as “a 25% discount off Financial Management Workshop 101” – worth $225. Another way of looking at this is an additional cost of $665 for said workshop.

Commonwealth Bank and NAB offer all the same individual products, and a similarly complicated set of calculations to figure out which bank has the most competitive package overall. And challenger brands – such as Bankwest business accounts or the St George BizPack – make it equally difficult to estimate the total cost of running a few perfectly standard accounts.

It’s the same old bank game of burying fees in incomprehensibility. But stay tuned: Mozo is set to unpick the fine print to find out which banks have the best business deals.

Do you have a business banking question? Ask the gurus on Mozo Answers, our super new Q&A forum.

 

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Independents sweep the Mozo People’s Choice Awards

By Kylie 14 September 2010 12:56ambanking, competition, Mozo, personal financeTag: > > > > > >

Money lovers, bank spotters and finance paparazzi take note: Mozo is chuffed to present our inaugural People’s Choice Awards.

In the last year, an astonishing 23,938 reviews were cast by you, the real customers, raving about your bank stars and dumping on your money duds. Mozo then crunched the numbers and tallied up the scores, to give voice to the people’s choice.

So who are the home loan heros, the credit celebs and stellar tellars? A round of applause for your winners:

Australia’s Best Bank

ING Direct

Australia’s Best Credit Union

Victoria Teachers Credit Union

Australia’s Best Building Society

The Greater

Sill more coveted awards – including best category performances and runners up – can be ogled at the People’s Choice Awards webpage.

And interestingly, it’s the new talent – the challenger brands and independents – who won your hearts and accounts. More interestingly still (if this kind of thing hits your sweet spot), the people rejected splashy headline rates and flash-in-the-pan intro offers in favour of the best ongoing deals.

For example, UBank – winner of the Best Savings Accounts – doesn’t have the highest rate on the market for its USaver account. However, it does offer an astoundingly competitive ongoing interest rate if you make regular contributions, and is perhaps the best choice for longer-term savers.

So why not get in on a spot of celeb-watching and discover the ultimate line-up of financial products: the best credit cards, home loans, savings accounts, bank accounts, personal loans, term deposits as chosen by the people.

Check out the winners podium at The Mozo People’s Choice Awards 2010.

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