Aussies stung by $12.5 billion in bank fees last year
The Reserve Bank’s annual survey of bank fees has recently revealed that in 2015, the income Australian banks earned from fees increased by 3.5%, to around $12.5 billion, with credit cardholders and other borrowers footing most of the bill.
The survey found that the fees charged to Aussie households accounted for $4,328 billion of the total amount, increasing by 2.9%. Businesses contributed the other $8,176 billion. This was the third consecutive year that bank fee income has increased in Australia.
A large portion of that growth came from credit card fees, up by 6.6%, due to both an increase in the fees themselves, and more fees being charged. Credit card annual fees and cash advances were the areas where credit card fee increases hit spenders hardest.
The good news was that Aussie credit cardholders were evidently being more responsible with their use of plastic, as the number of fees charged for exceeding credit limits and making late payments both declined.
The personal loan situation was in a similar state, with higher fees and turnover accounting for much of the 2.7% bank income growth, while penalty and transaction fees both declined.
Fee income from home loans also increased by 2.7%, mostly due to “a higher volume of new loans, more instances of early repayment fees and, to some extent, higher unit fees on home loan packages.”
On the other side of things, bank income from fees on deposit products, like savings accounts, bank accounts and term deposits, was down by 2.3%. This was partly due to the emergence of contactless payments systems that make cash withdrawals from ATMs less popular, but a shift to online savings accounts - which generally offer very low fees - also contributed.
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Another major influence was the introduction of 31-day notice periods on some term deposits, which has meant that fewer savers have been hit with early withdrawal fees.
Did you contribute to the bank’s increased profits by paying too many fees last year? Visit our banking hub to compare a range of products, from credit cards to home loans and find yourself the best deal out there.
Or skip straight to the best of the best, by checking out the winners of Mozo’s inaugural Experts Choice Australia’s Best awards, which were given to the banks that provided customers with the best value across all their banking products.