Want more bang for your buck?
You're not alone. We all want the best deal, but the time and effort involved often stops us doing the legwork to find it. Armed with the right knowledge and tools, there's no reason why you can't drive better deals and a fairer financial market.
That's where 'free' finance comparison sites like InfoChoice.com.au, Mozo.com.au and RateCity.com.au step in. Although they're definitely an efficient use of time, these services need to be used with caution as they tend to promote financial providers they have a commercial relationship with. But they can be useful tools for sifting through the options.
The power of comparison
When it comes to sorting out your finances there are hundreds of options available. It's difficult to find out just how many are out there, let alone compare them all.
In theory, comparison websites help you uncover deals you'd otherwise miss. And since more of us are using the web for quick answers, that means big incentives for providers to keep themselves at the top of the results list.
Sifting through the bias
Comparison sites are undeniably useful, but you need to carefully filter the information to make sure you find the right products for your needs.
When you hit the homepage of most comparison sites you're usually asked to choose a product category and then search. That brings up a range of deals or 'top picks'.
- To make sure you're viewing all the products on the website, ignore the deals and 'top picks' displayed.
- Instead, look for the button or link that allows you to compare all products.
- Once you 'compare all', the full list of products will appear and you can click on each to find out more information.
- You can often even apply online.
But there are some important things to remember before taking at face value the information provided by finance comparison websites.
Comparison tables aren't always organised to suit your needs. For example, in the case of credit cards, some sites may default their list by annual fee.
If you pay the full balance each month that sort option's great. But if you don't, you're better off searching for a card with a low interest rate.
Sponsored and featured listings are basically paid advertising, where providers have forked out for a premium position on the site. The issue with this is you can't always tell:
- what criteria is being used
- whether the listing's relevant to you or not
- what motives are behind the 'top' choices.
Some sites show sponsored listings first, but will let you uncheck a box so the table will display without that bias.
We've done a shadow shop on insurance comparison websites that looks at the issue in more detail.
Total market comparison
InfoChoice, Mozo and RateCity cover a large range, but they occasionally miss some good products. Other sites show a very limited number of products, so it's a good idea to check a variety of sources to get the best information.
Getting more of the story
There are limitations to the information these sites provide. Each site should point this out in their terms and conditions. A basic understanding of the financial products you are viewing and how you want to use them is important. If you're unsure, it's a good idea to get professional advice.
Be aware of advertising
It's simple, really – advertising can affect what you're viewing.
Comparison sites will often make money when you click on a link or fill out a form. In some cases these links can make it easier for you to access products without affecting the content you're seeing.
In other cases, host websites might skew the way information is displayed in order to get more clicks on the profitable links.
A good website is transparent about advertising practice and will place disclaimers about the content being displayed.
Unfortunately, the need to rank well in a Google search, editorial decision-making and revenue targets can sometimes blur the line between advertising and analysis.
Compare, ditch and switch
CHOICE's own financial comparison website Compare, Ditch and Switch is an advertising-free finance comparison site that you can use to view the latest:
- savings accounts
- credit cards
- home loans
- transaction accounts
- term deposits.
The website is powered by Mozo's financial database and updated frequently to provide the most recent and relevant information.
- Our tip: Do your homework before committing to a financial decision.
Make sure you're getting the full picture when comparing products on finance comparison sites so you end up with the best product for you, not the best product for a website's bottom line.