Avoidable credit card interest and bank account fees cost Aussie households $1200 a year
Article by Ben Tosi
Credit card interest is the biggest of three banking costs that, when combined, drain Aussie households of $1200 a year and make up almost a third of Mozo’s top 10 money wasters.
At a whopping nationwide cost of $5.5 billion, credit card interest is the fourth largest money waster for Aussies, costing us an estimated $653 per year, per family.
It is a pretty avoidable cost that Mozo Director Kirsty Lamont said can be combatted by making sure you’re with the most appropriate card for your current financial situation.
“Credit card interest is one of the most expensive forms of debt, that can sting even the savviest spender. It always pays to compare credit cards to ensure you’ve got the best card for your spending habits, and if you can’t pay it off, refinance and pay your debts,” she said.
The survey also revealed that, joining credit card interest in the top 10, was unnecessary bank account fees and ATM charges, which came in at 6th and 8th place respectively.
Of the two, and considering the abolishment of ATM fees by the big four, bank fees are the greater cause for concern, with Aussie household splashing out $511 a year that could instead be slipped into a high interest savings account.
Banking aside, Aussie households are needlessly spending almost $1300 a year on tobacco expenses, are throwing out an estimated $950 worth of food and gambling away just shy of $800 a year. Some of the smaller money wasters to round out the top 10 included traffic fines, energy waste and unused gift cards.
“Australians are hurting financially due to avoidable spending habits. With stagnant income growth and many households feeling the strain of mounting debt, the good news is there are simple ways to make positive changes to your bank balance,” said Lamont.
If you’ve got that guilty feeling in your stomach or would rather be slipping that $1200 into your family piggybank, check out our top tips to combatting cruel credit card interest, basic bank account charges and annoying ATM fees.
How to avoid -
Credit card interest
Avoid credit card interest by ensuring you’re paying the entire balance in full at the end of the billing period and not just making the minimum repayment. You can do this by automating payments and electing to have the full balance paid via your Australian savings or bank account, which means you’ll also avoid any late fees.
You’ll also want to avoid any cash advances as these transactions usually start accruing interest from the day you turn your credit into cash.
Bank account fees
Still have a bank account with a recurring monthly or annual fee? The good news is that, nowadays, there are a load of options on the market for fee-free banking.
These cheeky charges are more easily avoidable now that you have access to the big four’s broad ATM network. But basically, by walking a few extra yards to find a fee free ATM or by planning ahead and keeping some extra cash on you for unforeseen circumstances, you could avoid the pesky couple of dollars that some places, such as pubs or convenience stores, still charge to access your own money.