Welcome to 2019. We’re all better, more responsible people now, and doesn’t that feel great? We’re getting our spending under control, excelling at our hobbies and setting up better boundaries with technology.
We’re also not getting suckered in to paying fees on financial products anymore (or at least, we’re minimising the fees we pay). The 2019 version of us knows how paying fees can derail our finances in the long term, and considering the lofty money goals we set for ourselves this year, that just won’t be tolerated.
With that in mind, here’s how to avoid the most common fees in 2019.
[referenced url=”https://www.lifehacker.com.au/2018/12/how-to-improve-your-finances-by-1-in-2019/” thumb=”https://www.lifehacker.com.au/wp-content/uploads/sites/4/2017/01/Pocket-Money-410×231.jpg” title=”How To (Realistically) Improve Your Finances In 2019″ excerpt=”One of time’s tested and true hacks is that to get better at anything, you need to start small. Whether your goal is to save $10,000 or $500, starting in small increments is the only way to attain it.”]
Bank Account Fees
There’s no reason for anyone to pay a bank to hold their money. If you are, there are plenty of options out there that will save you money while providing the same amount of service and support.
First, call your bank and ask if there’s an account you can be switched into that won’t charge you monthly maintenance fees. At the time of writing, NAB, HSBC, ME Bank and ING have everyday accounts with no account fees, and almost all of those have no minimum deposit. ANZ, Bankwest, Westpac and Commonwealth will also waive monthly account fees on certain accounts if you deposit at least $2,000 a month.
Then they’ll switch the name on your account and you will be all set, and you will have lost around five minutes’ time.
If that doesn’t work, then it’s time to switch to a new credit union or another bank. Here you have some considerations. An online bank might be better for you—often there aren’t minimum balance requirements, and you can earn slightly more interest than you would at a national brick and mortar. Credit unions also might offer you better interest and customer service.
The biggest thing to keep in mind is footprint. If you often go into a physical bank branch, or like the fact that you can if you needed to, then you might want to stick to a regional bank with a large physical footprint.
Also, consider how often you use an ATM and whether or not the institution you’re switching to has ATMs in the areas you live and work. Switching to a credit union only to pay ATM fees multiple times a month isn’t solving your fee problem.
Once you’ve done some research to find the institution that best fits your financial reality, here’s how to make the switch:
Open an account at the new institution: You need to leave some money in your old account to cover any bills that crop up, but open a new account and transfer funds to meet any minimum requirements (ideally there won’t be any, but you never know).
Transfer your bills to the new account: Go through your bank statements and switch bill payments to your new account. You want to get the timing right so you have enough funds to cover the bills, and don’t incur any insufficient fund fees, or late payment fees on your bills. Make sure any checks you’ve written (like, say, for rent) have cleared from your old account. It might take several weeks for accounts to switch, depending, so be patient, and make sure you have enough money in your old account to cover any surprises.
Ask your old bank for confirmation of closure: Once you’ve moved your money, visit your old bank (ideally in person) and ask for confirmation that your account is closed down, especially if you’re moving to avoid a monthly maintenance fee.
Bank Overdraw Fees
Bank overdraw fees can cost as much as $15, depending on the institution. The easiest way to avoid this is to check your balances daily, and link a savings account to your checking account. Out of the Big Four banks, only NAB’s Classic Banking account offers no overdraw fees.
If you’re worried about overdrawing, turn off your account’s overdraft protection. (Commonwealth Bank, for example, has advice on how to do this here.) Your debit card purchases will be rejected, but you won’t incur a fee. And sign up for your banks balance text alerts, if they offer them.
Bank Transfer Fees
In the midst of your bank transfer, you might notice that banks impose a fee to transfer money to each other, averaging around $US25 ($36), according to NerdWallet. That’s not great.
If you’re sending money to other people domestically, there are ways to get around the fees. Use a service like Venmo or Zelle. It adds friction, but you’ll save money. Australian banks also have certain accounts that offer unlimited transfers been linked bank accounts, so you’ll want to take note of those.
Something else to keep in mind: This is one case where calling the bank might add to the fee, according to NerdWallet. The best way to transfer funds is often online.
Credit Card Annual Fees
The easiest way to avoid this fee is, of course, not to have a credit card with an annual fee. But given the other benefits of these cards (many, though not all, of the best travel rewards cards, for example, have a fee attached), you don’t necessarily want to avoid them altogether.
So, do the maths on whether the benefits make up for the cost. Many cards with an annual fee will waive it for the first year, and there’s a list of cards here that have no annual fee at all. After that, look at your usage and see if the rewards made up for the fee.
And try calling your issuer and asking them to waive the fee. According to a poll from CreditCards.com, 70 per cent of people who asked for the fee to be waived were completely successful, or had it lowered. Especially if you’ve been a long-time card holder and have a good payment track record, your issuer may be willing to do so. You never know until you call and ask.
Credit Card Balance Transfer Fees
The typical fee to transfer credit card balances is around three to five per cent, according to Credit Karma. But the point of transferring balances is to save money on interest and pay down debt, not spend more, and there are plenty of cards that don’t charge a fee and offer an introductory 0 per cent APR for a period of time.
Finder has a list of credit cards with 0 per cent balance transfers, with the introductory 0 per cent period lasting from anywhere between a year and two years. Some issuers will also allow balance transfers between partners, and you can find a list of what banks will allow balance transfers between partners and joint primary cardholders here.
Don’t be afraid to look to credit unions, either, which can have some great options. Just take the membership requirements into consideration.
“Don’t sound too enthused about any offer. Ask if they have anything better. A supervisor may indeed be able to offer you a better deal,” writes Bankrate. “And there’s another thing to keep in mind: Next week, a 0 per cent offer may be introduced. Make sure you find out when new transfer offers might be available.”
Credit Card Foreign Transaction Fees
If you travel often, you probably already have a card without foreign transaction fees. If you don’t, it’s easy to find one. Capital One and Discover don’t have these fees on any of their cards, and pretty much any issuer will offer a card without them. If you have a trip coming up, it might be worth applying for one of these cards to have in case of emergencies.
Credit Card Late Payment Fees
This is one of the simplest fees to avoid on the list. Put your bill on auto-pay, and you won’t have to worry about paying a fee. To be safe, but your credit card payment date as a reminder in your calendar, and check in day-of to make sure it’s been paid.
If you are late, call your issuer and ask if they can waive it. This works the sooner you do it, and if you have a good track record of paying on time already.
Early Termination Fees for Phones/Internet
If you break a contract with your phone carrier or internet company, chances are you’ll be charged an early termination fee. There’s not a ton of leeway here, as the company has no reason to waive the fee for you. But you can ask your new provider to cover the fee. Many companies offer to cover the fees as a way to entice new customers.
[referenced url=”https://www.lifehacker.com.au/2017/09/how-to-negotiate-a-cheaper-mobile-phone-plan/” thumb=”https://i.kinja-img.com/gawker-media/image/upload/t_ku-large/kz5ool2jnpg2jdbfgdhf.jpg” title=”How To Negotiate A Cheaper Mobile Phone Plan” excerpt=”Last month, we challenged you to save money on your mobile phone bill by switching to a cheaper plan. This doesn’t necessarily mean you have to switch carriers, though. You might be able to negotiate a better price with your current one.”]
Installation Fees for Cable/Internet
If your home is already wired, then chances are you can set up your new internet modem yourself. Or, use the old standby: Ask the company to waive the fee. And if you’re renting a modem or some other equipment from your provider, it probably makes more sense to buy your own. You’ll pay more upfront, but you’ll come out ahead in the long run.
No one’s perfect – all of us will spend some money we didn’t need to. But that doesn’t mean you can’t try to minimise how often you do. Set up balance alerts, remember to put bill payment due dates in your calendar and automate what you can. A quick phone call can save you tens or hundreds of dollars.
Always read the fine print, and remember in today’s financial ecosystem, there’s bound to be someone who can offer you a quality product for free, or for less money than your current provider. There’s just no reason to pay excessive fees.
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