Just this morning I was charged a 50 cent surcharge fee for using my debit card to pay for my morning coffee, as I forgot to withdraw cash on my way to work. That has got to be one of my biggest gripes!
Whether it’s a skyhigh taxi charge or a $2.50 ATM withdrawal fee at the pub, I’m sure at one time or another we’ve all felt the bite of a convenience fee. Thankfully, with a little forward planning you can avoid these pesky fees and save yourself hundreds along the way.
Here are the top rip-offs and some thrifty tips to stay money motivated over the week (and the weeks to follow):
1. Credit card surcharges
Who doesn’t love the convenience of a credit card? But these shiny pieces of plastic often mean you are charged a surcharge for using this payment method. The reason merchants charge a credit card surcharge fee is because every time a customer like you pays with a credit card they incur a fee by the card provider, which the RBA says is usually between 0.8% to 1.4% for Visa and MasterCard and from 1.8% to 2.4% for American Express and Diners Club. The credit card retailer has the choice to either absorb this fee or pass it on to you.
The best way to avoid credit card surcharges is to have another payment method in your wallet, like a debit or EFTPOS card and press ‘savings’ or ‘cheque’ instead of ‘credit’ at the terminal to avoid the credit card sting.
2. “Tap and go” surcharges
We should also mention that fees can apply for “tap and go” contactless purchases under $100, as payWave and PayPass use the credit card system not the EFTPOS system when a transaction is put through. So utilise the same tactic of entering your PIN using the ‘savings’ or ‘cheque’ option.
3. Payments under $10 fee
Of course, if you’re making a small purchase under $10 in many cafes and convenience stores you could still be charged a fee, whether you use ‘savings’ or ‘cheque’, as many merchants have a minimum spend requirement.
The solution? Always carry a bit of coin with you, so that you can pay for the big things with card and all those other small purchases like your morning coffee and lunch with cash.
4. Taxi fees
Catching a cab is expensive enough, factor in a 10% extra fee for paying with a credit, debit or even EFTPOS card and the price really soars. So if you know you’re going to need to catch a taxi on a Saturday night out or from the airport, make sure you withdraw some extra cash before hand to avoid this money guzzling fee.
5. ATM withdrawal fees
Of course, if you’re going to withdraw money from an ATM to avoid card fees, you’ll want to make sure you’re not slapped with a withdrawal fee – as this will defeat the purpose in the first place!
Don’t fall for the cost of convenience trap and withdraw from the closest ATM with a $2.00-$2.50 ATM fee, instead find out what your financial provider’s ATM network is and walk the distance to get cash out. Even better sign up with a bank account like the ING DIRECT Orange Everyday with a debit card that allows you to withdraw from any ATM in Australia without being charged a withdrawal fee (as long as you deposit $1,000 into the account each month).
6. Travel booking site fees
Comparison travel sites are great platforms to use to compare flights, hotels and activities for your next vacation, however to make a profit they will charge you a fee if you book through them. For instance, Webjet has a $29.95 international processing and booking fee.
A thrifty way to avoid the travel booking fee, is to use the comparison sites to compare costs and once you’ve found the best deal, head straight to the airline/hotel or tour company to book directly.
What hidden fee have you been charged lately?