With so many expenses to think about at the end of the year, staying on track with money management can be a serious challenge.
But while spending money on presents, food, social outings and celebrations can all be budgeted beforehand, fees pose unexpected costs that could lead to a lot more charges on your debit card.
First of all, there are account fees that could make it more expensive to pay by card.
While debit cards do not charge interest or have the high annual fees associated with credit cards, there are still some accounts that do subtract monthly, quarterly or yearly service charges from your balance.
The ANZ Access Advantage account, for example, charges $5 per month or $60 per year, while Westpac Choice, St George Freedom and the Bank of Melbourne Sense accounts require a minimum monthly deposit of $2000 before they are fee free.
There are also foreign ATM withdrawal charges, international transaction fees and penalties for overdrawn accounts to consider.
In fact, data from the Reserve Bank of Australia shows that standard banking fees cost us $4.1 billion in 2012, while exception fees cost another $261 million on deposit accounts alone.
The Australian Bankers Association also reported that the average household is paying $8.94 every week in bank fees. That works out to $107.28 per year, or enough to buy one or two nice Christmas presents.
But banking fees are only a small part of the potential fees you could face at this time of year. There are also transaction fees and additional charges that could take your budget off the tracks.
Surcharges for paying by card, for example, could add anywhere from 1% to 15% onto the price of presents, dining or travel – especially the latter.
Similarly, if you turn to the web for your shopping, then shipping costs could quickly add up.
While online retailers often advertise free shipping, in many cases it is only conditionally available. If you purchase more than one product, for instance, or if you total transaction is over a certain amount.
But if you don’t meet those requirements, you could pay anywhere from $5 to $30 for domestic shipping. The issue of postage from Australian online stores has been further complicated by Australia Post’s decision to increase postage charges earlier this year.
In a report from The Sydney Morning Herald, online retailers said the changes would force them to charge customers more for shipping.
Bookstore owner Chris Elworthy, for example, said he would now have to pay $11.70 in postage to send an $8 paperback book, while UK retailers could send the same book for about $3.
On the flipside, if you plan to send gifts to people for Christmas, the cost is likely to be more than you expect.
To give you some idea of postage charges, a prepaid 500g satchel from Australia Post costs $8.25, while a 3kg is $13.40.
These costs are often not factored into Christmas budgets, so they could just as easily leave you out of pocket as any of the other fees mentioned above.
Tips For Dealing With Fees and Christmas Costs
While some of these fees do not amount to much on their own, over time they can add up to hundreds of extra dollars spent at this time of year.
But there are a few things you can do to get a handle on the cost of Christmas, and avoid fees and the following tips are a good place to start:
- Ask your bank about potential fees they may charge and the best way to keep charges as low as possible.
- Look for a debit card that doesn’t charge international transaction fees, like the Citibank Plus.
- Make a list of everything that you will spend money on around Christmas time, including presents, cards, food, drink and travel.
- Look at purchase policies and charges online before deciding where to buy presents or make holiday bookings.
- Buy presents all at once, so you can save on shipping and other possible fees.
- Compare different store policies and charges so that you can decide on the best places to buy things.
- Factor fees into your Christmas spending budget so that you have money put aside for them if you need it.
While individual fees tend to seem quite low, they can have a significant impact on any budget.
With so many things happening at this time of year, it is important to be aware of where additional costs could come from so that you can find ways to reduce them and keep your budget in check so that you can enjoy the celebrations.