What Steven Cousley Does

Fighting Unfair Bank Fees in Australia

The key to fighting excessive bank fees is to know the terms and conditions of the accounts you use. In recent years, most Australian banks have increased fees or introduced new fees. Be aware of the terms in the fine print. When you activate an account you are accepting the conditions imposed by the bank and this usually includes a disclaimer that the bank can change the conditions.

One of the newer ways that banks are robbing us, is with the use of “shadow limits”. Supposedly all credit cards have a credit limit determined by the bank and accepted by you. However, the banks may allow a transaction to go overlimit, up to a certain point. They won’t tell you what that “shadow” amount is. They will charge you an overlimit fee. As I see it in that situation, the bank has two choices. They could just decline the transaction, which in the case of credit cards, can result in no extra fee, or they allow the transaction, and charge you extra. It’s easy to see which option is better for the bank. If your account remains overlimit they will charge you the fee every month until you reduce the balance.

Shadow limits can also apply to ordinary savings or cheque accounts. When an account is low on funds and a transaction would result in overdrawing the account, the bank may reverse the transaction and apply a dishonour fee. Some banks will allow the transaction, again, up to some unknown limit, and apply a similar fee for over drawing the account. They may even charge you the same penalty several times in one day if multiple transactions are involved. The resulting fee can end up costing you more than the actual amount of the withdrawals. Ask your bank if your account has a “shadow limit” and if you don’t want it, ask them to remove it.

Over the last 5 years, credit card fees and penalties have been on the rise. The best way to fight this is to shop around for a low fee credit card. When transferring a balance to a new card, again check the fine print on the new card. Be sure there is no hidden surprises. If you don’t need or don’t use the extras provided by a high fee card, change the card.

If you are not happy with the fees your current bank is charging you, shop around. Make a list of the account features that are most important to you, and start looking for another bank or credit union that will provide just the features you need. Don’t be caught paying for services you won’t use. You can visit the banks/credit unions themselves to ask questions, but you can also do a lot of research online. It’s easy to do a search for information on specific account types and you will also find forums where others discuss their own banking experiences. It’s your money, take control of it.