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The hidden fees that are making you poorer

Jun 30, 2015

Cut out these pointless fees and you could find yourself hundreds or even thousands of dollars better off.

It’s easy to get stung left, right and centre by pesky fees.

Some days it seems that everyone, from taxis to banks to ticket sellers, wants an extra slice of your cash, without doing anything to deserve it.

Ten ways to make extra coin
20 things that are just a big fat waste of money
• Seven sensible ways to spend $1000

Here are 10 particularly irritating charges to look out for, and a few ways to limit the damage to your hip pocket.

1. Multiple accounts not so super

Had a few different jobs over the years and been too lazy to streamline your super? You wouldn’t be the only one.

However what you may not have considered is the damage you’re doing to your hip pocket by continuing to pay multiple administration fees. If you have four different super accounts, you could be wasting well over $1000 a year on admin fees, investment fees and insurance premiums.

“The simplest way is to consolidate all of them into one super fund account but beware of cutting out life insurance cover that you may have in those funds that you intend on closing,” says Dr Adrian Raftery, a senior lecturer in financial planning and superannuation at Deakin University.

2. BUT, beware of shutting down a super account too soon

“If you do close your super fund accounts, sometimes there are withdrawal or termination fees,” says Dr Raftery, who warns these can be as high as two per cent.

He recommends checking the conditions on your super account before closing it. You may choose to wait until the condition period ends before shutting the account, or transfer a portion of your money to another account (check there’s no fee to do so).

3. Annoying ATM fees 

Sure, we all get caught out from time to time, but why regularly pay $2 ATM fees just to access your own money? 

“Either walk down the road for the right ATM or change banks so the ATM you regularly use is charge-free,” says Dr Raftery

He says wasting $2 twice a week in this fashion adds up to $200 a year.

If you’re a serial offender, some accounts – such as ING Direct’s Orange Everyday account – offer free withdrawals from any Australian ATM (the catch is you must deposit at least $1000 a month).

4. High bank fees 

Ditch any bank accounts that have high monthly fees but offer little in return.

Same goes for credit cards – particularly the premium kind. If you were lured in by a special deal, don’t forget to cancel your card after the benefits stop rolling in.

5. Penalty fees

“Pay your credit card on time each month to avoid excessive late payment fees,” says consumer watchdog CHOICE spokesman Tom Godfrey.

“You could even choose an account that doesn’t charge penalty fees, or an account that charges lower penalties.

“If it’s too late for that, contact your bank and ask for penalties to be reversed.”

6. Dodge the airline mark-ups

Airlines are shockers when it comes to trying to upsell. It’s likely you’ll have to unselect several options – seating and baggage for starters – before getting anywhere near the payment step.

Once there, CHOICE recommends looking for a fee-free payment method to avoid excessive credit card surcharges.

For example, a Jetstar domestic flight will blow out by $8.50 per passenger per flight if paying by card, or by $17 per booking via PayPal.

In this instance, online booking system POLi is the only way (except for applying for a Jetstar credit card) to avoid hefty fees. 

7. Online shopping sting

“When shopping online, don’t assume that by paying in Australian dollars you’ll be avoiding fees,” Mr Godfrey says.

“Avoid foreign transaction fees by being particularly wary if you’re shopping with a foreign company as they may not have an Australian payment provider.”

If in doubt, he recommends using a debit or credit card that doesn’t charge international fees.

8. Ridiculous ticket fees

Sporting or concert tickets are already pricey, and that’s before you get slugged with a ticketing fee.

Ray Jaramis, adviser with Treysta Wealth Management, says it’s sometimes difficult to see where “a commercial expense exists to warrant a subsequent fee”.

“For instance, I imagine the cost to email me my ticket to the sports match this weekend would be close to non-existent and the fee is a bit of a free kick for the service providers.”

9. Taxi turmoil 

Mr Jaramis also gets frustrated by the extra charges that can accompany an average taxi ride. 

“The meter happily ticks along as you go on your journey, only for you to find that there are a few quick additions to the fare before you’re asked how you would like to pay,” he says.

Opting for Uber, which lets you do a fare estimate before travelling, and is usually cheaper than standard taxi companies, is one way around the problem. 

10. Avoid overdue fees 

Don’t be your own worst enemy. Return your DVDs and library books on time, pay your traffic fines and rates (or request a payment plan), and find gas and electricity suppliers who will reward you with a discount for paying by the due date.

 

Original article published in The New Daily on 30 June 2015

 

 

 

 

 

Tags: 101 WaysBudgetChartered AccountantFamilyTravel

Author: Larissa Ham

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