Fees. Everyone hates them. And the worst kind are the ones that could be avoided. The ones that show up on your bank statements, taunting you like the glaring, avoidable irregularity that they are.
The good news is that these fees can disappear just as easily as they appear. It’s all about keeping on top of your finances. Having an eagle eye on the details. Constant vigilance. And it’s actually not as hard as it sounds. Once you’re in the know about how to do it, you’ll be on your way to a glorious avoidable-fee free future.
Sound good? Great. If you want some one-on-one help, talk to your bank. They’re the experts and can take you through a review of your accounts and transaction history to identify areas where you may be leaking money unnecessarily.
If you’re more into the DIY approach, here are some places to start:
Welcome to the future. Now you need never stand in line in a store to transfer money between accounts, or wait on hold to check your balance. It’s a new world! Some banks incentivise customers to bank online by waiving the fees on accounts for things like signing up for online statements instead of paper ones. Cutting the fees AND choosing an environmentally friendly, sustainable option? Double the awesome. Check with your bank to see what they’re offering.
Choose the right accounts
Make sure you have a clear understanding of how the fees on your bank accounts work. For example, if you choose a high interest savings account that allows you one free withdrawal per month, keep in mind that you’ll be charged fees for every extra withdrawal you make. Avoid doing things like hooking this account up to your EFTPOS card, as you may be tempted to dip in from time to time. The extra fees act as an incentive to make minimal withdrawals, therefore helping you to hit your savings goals, but if the account is costing you more in fees than you’re earning in interest, it may not be the right one for you.
Other accounts may be set up to allow you to move money around online for free, but incur costs if you withdraw directly from the account. Review your accounts and make sure you’re using them in the way you thought you would – if you’re regularly being stung with extra fees for using the accounts in the wrong way, maybe consider changing it up and finding an account that better suits your needs.
Read the fine print before you travel
Getting money from ATMs overseas can be a bit of a rude shock – international ATM transactions on credit card can carry fees that are much higher than usual. Avoid them by getting organized before you go – get a Cash Passport or other specialized source of money for international travel and make sure you get to spend your cash on souvenirs, not bank fees.
Seek out your bank’s ATMs
Don’t forget - every time you use another bank’s ATM you are charged a fee. If you have the choice, stick with ATMs from your bank. It might mean you have to plan your day in advance or walk a bit further up the road to find another ATM, but it all adds up in the end.
Another thing to remember when it comes to ATMs: try to avoid withdrawing cash from your credit card. It’ll incur a Cash Advance Fee, is charged whether your account is in credit or debt, and is also charged on some bill payments. Check the details with your bank so you know what to expect.
Avoid going in to accidental overdraft
When you put your account into accidental overdraft, there are fees involved. Avoid this by being mindful about your incomings and outgoings. If you’ve got automatic payments or direct debits set up, make sure to check that you have enough money in the account to cover the outgoing payments. If you are regularly going over your limit, applying for a permanent limit could help you avoid the Unarranged Overdraft Fee. Another way to stay on top of what’s going on in your accounts is to set up email or text alerts to let you know when your money is on the move.
Take advantage of special account offers
Many banks offer fee-less accounts to specialized groups of customers based on things like age, occupation or employer. BNZ offers certain accounts fee-free to customers aged under 19. Other groups that can cash in on these offers include tertiary students, graduates, apprentices, and employees of organisations that have a ‘work perks’ agreement with the bank. Check with your bank to see if you qualify.
Do a balance transfer for your credit card debt
We’ve talked a lot in the past few months about how you can avoid increasing your credit card debt unnecessarily, and doing a balance transfer is one of them. Sure, interest isn’t technically a ‘fee’, but it still falls into the category of ‘annoying-extra-cost-that-could-be-reduced’. So look in to a low or no interest balance transfer to see if it might be worth your while – you’ll find information here, and here, and here.
Pay your credit card in full every month
Again, we’ve talked a lot this year about credit cards and avoiding interest. There’s not much we can do about the set credit card fee, but avoiding paying interest is achievable if you’re disciplined. Even paying the minimum amount each month means you will be avoiding Credit Card Late Payment fees, and potentially the over limit fees. Get motivated and take control with this, and this, and this.
Do a yearly review
Sit down once a year and look at the big picture on your bank accounts and insurances. Are you paying more than you need to? Can you reorganise your accounts and policies to cut out unnecessary fees? Taking the time to sit down and do an annual review may result in some very real savings fee-wise.