Reducing your bank fees

January 27, 2006 12:08 AM

This is going to be mundane but what the heck, it applies to almost everyone of you who reads my blog because:

  1. You work and therefore you earn a salary,
  2. thus you have money and would therefore use a bank account,

I’m gonna use myself as an example. Even though the details may be different, especially if you don’t live in Australia, the principles should be the same.

You only have a set amount of fee-free transations, whether they be EFTPOS*, direct-debit to pay your bills or the ATM. After which, your bank would charge you a fee for each transaction.

The quick and easy way to bypass all that is to get a credit card. Credit card companies do not charge you on the transactions. But they do charge you interest if you don’t pay your account in full at the end of every month, so be aware of that.

Once you’ve got a credit card:

  1. transfer all your automatic bill-payments to the credit card,
  2. and use cash or your credit card to make most of your purchases.

The only bank transaction that you should be doing is withdrawing cash from the ATMs. But avoid other banks’ ATMs as well as those at convenience stores, pubs and nightclubs. You should always try and withdraw from your bank’s ATMs. Otherwise you’d get slugged with another fee again. Yeah bloodsuckers, I know.

The precaution that you have to take with credit cards is that you have to be disciplined – pay off the bill every month and don’t splurge on it. Remember that you are still withdrawing cash from your ATM. Do not be tempted to use revolving credit as well, ie. using one credit card to pay off the other. You’d be trapped in an endless cycle of debt.

* EFTPOS = Electronic Funds Transfer Point-of-Sale. Works like debit-cards.

Idea for this post was inspired from reading:

8 thoughts on “Reducing your bank fees

  1. hobart

    actually i use HSBC…i get unlimited free EFTPOS…heh heh…the only problem i get is that we only have 5 free non-HSBC atm transactions per month…and in Melbourne , there’s only one chain in the main CBD and one more hidden some where…so it’s quite a drag when it comes to withdrawing cash and carrying it…unless of course you spend it straight away and start a vicious cycle.

  2. Ally

    uh. dont you just swipe ur EFTPOS card when u make a purchase and they dont charge u a fee for that? :/

    or maybe its cause i’m on some tertiary student plan :/

    i’m confused.

  3. mooiness

    hobart: there you go – it’s all a matter of compromise. I go with a “mainstream” bank because their ATMs are everywhere. But if you get unlimited EFTPOS, then use that for your cash withdrawals. 😉

    ally: maybe you are on a special plan but everyone else gets a set amt of EFTPOS transactions. Most times it’s also a combined total of EFTPOS, direct-debit and ATM transactions. Mine is 10 – not a lot. If you go over that, you are charged for every transaction.

  4. CherryRipe

    Banks in Australia – CROOKS!!! I was shocked when i returned from London last year and saw the list of chargeable transactions. What galls is that even electronic transfers get charged – wtf? Crooks. Fees for EFTPOS transactions is like charging someone for a glass of water at the bar. Grrrr! I cottoned on to using my credit card early on in the piece but it still raises my hackles every time i get my bank statement – stating the obvious, as this comment reveals. Crooks.

  5. mooiness

    cherry: when EFTPOS fees were managable and I actually had 20 free transactions, I’d prefer to use it since I can better control my spending since the money is coming right out of my savings.

    But not anymore since they’ve reduced the amt of free transactions and raised the fees. Crooks, yes.

    Only in Australia where a big chunk of a bank’s profits can come from mere “fees”.

  6. Pingback: CREDIT WHERE IT’S NOT DUE « JadedLotus

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