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credit cards no fee low interest


  • pg 1
									How to save on fees
and charges

Financial institutions (includes banks, building             • Fee-free accounts—these concessional accounts
societies and credit unions) and institutions from the         have no monthly fees and offer a number of free
financial services sector (includes finance companies,           transactions each month.
investing companies and loan companies) make their           • In some cases, accounts with the lowest fees pay
money by moving your money around and charging you             lower interest—remember to check. Paying the lowest
for the service.                                               possible fees may mean you get lower interest.
                                                             • Some accounts offer fee waiver or reduction if you
To find ways to reduce or eliminate how much you
                                                               maintain a specified minimum monthly balance.
and your family pay in fees and charges, you should
                                                             • Combining more than one account may allow you to
understand your banking and financial needs, examine
                                                               avoid paying service fees that are charged on small
your spending and payment habits and then shop
                                                               account balances. This can also help when it comes
around for accounts/cards to suit to your needs.
                                                               to deeming accounts and maximising interest—
Regardless of the type of accounts you have, know              particularly for couples.
their features. Shop around and compare what other           • Conversely, having more than one no fee account—
institutions have on offer.                                    each with a small number of free transactions may
                                                               eliminate your current monthly fees.
                                                             • Accounts that offer cheque facilities may charge
Fees and charges                                               ‘Debits Tax’ on all withdrawals while others charge
Fees and charges may be for administration, for                the tax only when a cheque is debited to the account.
transactions or for interest on borrowed money. They           Select accounts that have the features you need
may be charged across your savings accounts, cheque            and use.
accounts, combination savings/cheque accounts,               • Reduce the number of transactions you make—this
credit cards, debit cards, overdraft facilities, home loan     may help you reduce your fees. Plan ahead so you can
accounts, personal loans and combination packages.             make fewer withdrawals.
Consequently, you need to calculate the actual impact        • Consider using EFTPOS (Electronic Funds Transfer at
of your spending patterns on your monthly fees                 Point Of Sale) to obtain cash. By using a debit card
and charges.                                                   linked to your transaction account to pay for your
                                                               purchases, you can ask for cash at the same time
                                                               and this will count as only one transaction.
Savings and cheque accounts                                  • If you are comfortable with using ATMs (Automatic
Financial institutions usually have a choice of accounts       Teller Machines), EFTPOS, telephone banking or
for different levels of use. Choose carefully to suit your     the internet, use them wherever possible. The fees
spending and transaction needs.                                charged for these transactions are generally lower
• Frequent ATM users are better off paying a monthly           than those charged for transacting face-to-face with
   account keeping fee as it is likely to be cheaper than      staff. In some cases, these services are free.
   paying (excess) transaction fees.

                                                                                                     FIS028.0809 (page 1 of 3)

         • If you need extra cash, take it out when using EFTPOS
           when you pay for groceries or petrol as the two
                                                                      Debit cards
           transactions only attract one fee.                         • Similar to credit cards, but the whole balance is
         • Use your own financial institution’s ATMs. While              payable at the end of each month.
           most ATMs allow you to obtain cash using cards from        • Be aware that non-payment of whole or part of
           competitor institutions, the charge is usually more for      the balance can incur a hefty ‘late payment’ or
           this service.                                                ‘delinquent’ charge.
         • Some financial institutions offer their shareholders        • Debit cards also can have varying interest free days
           fee-free accounts and other benefits.                         for your purchases.
         • Negotiate—customers doing a lot of business with a         • Some debit cards also allow for minimal cash advance
           single financial institution should ask to be exempted        access. A cash advance on your credit card should be
           from transaction fees.                                       a last resort as interest is charged immediately as
                                                                        well as a transaction fee.
                                                                      • Rewards do not necessarily come at nil cost. Often
         Credit cards                                                   rewards programs can only be accessed by paying an
         • If it suits your spending patterns, and you are              annual reward charge.
           comfortable with using credit cards, you can benefit        • Pay the whole balance in one instalment as a
           from using a credit card with varying interest free days     number of payments over a month may incur multiple
           for your purchases.                                          transaction fees.
         • You can use one transaction from your savings              • Reviewing what is being offered by your debit card is
           account each month to pay off the credit card account        always wise, as the fees and conditions can change
           balance. If you pay the full balance that is                 at any time.
           outstanding on your account on time, you can avoid
           interest charges altogether and gain more interest on
           your savings.
                                                                      Home loan accounts
         • An annual charge usually applies to a credit card that     • Those with home loans should negotiate with their
           offers an interest free period.                              institution to waive the fees.
         • A higher interest rate is usually charged for cash         • Refinancing your home loan may also save you money
           advances and amounts outstanding after the interest          in the long run. As always though, you should look at
           free period than is charged on credit cards without          the up front and continuing costs or fees of all options
           an interest free period. The interest is often charged       before making your final decision.
           from the date of the transaction.
         • A cash advance on your credit card should be a last
           resort as interest is charged immediately as well as a
           transaction fee.                                           • Consolidating all of your banking business with
         • Interest rates vary—consider one of the many low             one institution may save on fees. Most financial
           interest credit cards. Some have low or no fees, and         institutions offer fee waiver or reduction when you
           can also include interest free periods vary.                 package several products such as loans, transaction
         • Rewards programs do not necessarily come at nil              accounts, credit cards and insurance.
           cost—often they can only be accessed by paying             • Many mortgages offer an offset facility which will
           an annual reward charge. If you don’t spend large            reduce your interest charges.
           amounts and won’t use the rewards, don’t join.             To find out more contact direct your account provider
         • Reviewing the fees and conditions of your credit card      or your card provider.
           is always wise, as these can change at any time.

FIS028.0809 (page 2 of 3)
                                                                How to save on fees and charges

How to find out more                                        Disclaimer
Financial Information Service                    13 2300   The information contained in this publication is intended
Planning for or needing help in retirement                 only as a guide to payments and services. It is your
                                                           responsibility to decide if you wish to apply for a
Financial Information Service
                                                           payment and to make an application, with regard to your
seminar bookings                                 13 6357
                                                           particular circumstances.
Looking for work                                 13 2850
                                                           This information is accurate as at September 2008. If
Parent or guardian                               13 6150   you use this publication after that date, please check
To speak to Centrelink in languages                        with us that the details are current.
other than English                               13 1202

TTY* enquiries                 Freecall™ 1800 810 586
*TTY is only for people who are deaf or have a hearing
or speech impairment. A TTY phone is required to use
this service.

Go to our website at www.centrelink.gov.au

Check the “we speak your language” link on Centrelink’s
website for information in languages other than English.

Note: calls from your home phone to Centrelink “13”
numbers from anywhere in Australia are charged at a
fixed rate. That rate may vary from the price of a local
call and may also vary between telephone service
providers. Calls to “1800” numbers from your home
phone are free. Calls from public and mobile phones
may be timed and charged at a higher rate.

                                                                                                       FIS028.0809 (page 3 of 3)

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