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Banks top Bahamas in fee frenzy

CHOICE says the banks are in a fee frenzy as Australians pay nearly $12 billion in fees

18 June 2015

CHOICE says new figures showing Australians paid nearly $12 billion in bank fees last year raise fresh questions about the level of competition in the banking sector.
"The banks are in a fee frenzy, clipping the ticket on our credit cards and personal loans, with fees growing at 2.8 per cent, faster than the consumer price index," says CHOICE Campaigns Manager Erin Turner.[1]
"This concerning given we know 1 in 5 Australians live off their credit cards to get through until pay day and often have to carry balances forward and suffer an excessive interest rate punch.[2]
"It is staggering that last year an average household paid $468 in bank fees.[3] Fees have been rising fastest on credit cards, with a 5.9% growth in fees over the last year."
CHOICE says that while the year-on-year increase in fees is concerning, the fact that total fees remain near $12 billion is completely unacceptable.
"This is an extremely profitable industry, one that refuses to pass on RBA interest rate cuts, that charges exorbitant credit card rates, yet seems to be saying that $12 billion in fees is a great result," Ms Turner says.
"The banks have released a 38-page report welcoming the fact that consumers paid them $12 billion dollars on top of the money they earn from us in interest and for holding our savings. With the banks collecting more in fees than the GDP of the Bahamas, this just isn't good enough."[4]
CHOICE says consumers looking to avoid hefty fees should weigh up whether they really need a high-fee credit card, or if they would save money with a low-fee, no-frills option.

[1] See RBA, Banking Fees in Australia, 2015
[3] The Australian Bankers' Association, Fees for Banking Services – 2015 Report, shows that an average household paid $9 in fees each week, or $468 in the year.
[4] The GDP of the Bahamas in 2013 was $8,420,000,000 USD according the World Bank Currency conversion using has GDP equivalent to $10,882,160, 148 AUD

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