Loan, credit card fees go up

11/06/2010

Bank fees on loans were all up last year according to the Reserve Bank. The fee income from housing loans was up 17 per cent, fees on personal loans were up 14 per cent and fees on credit cards were up eight per cent. The RBA says the increase in housing loan fee income was driven by establishment and early exit fees. “The available information suggests that break fees on fixed rate loans accounted for a significant proportion of the overall growth in fees.”

A significant part of the growth in personal loan and credit card fees was due to strong growth in exception fees, consistent with the growth in non-performing unsecured personal loans during the year. Exception fees on credit cards made up the largest share of exception fees paid by households. The RBA expects that the removal of or reduction in exception fees by some institutions will see a reduction in these costs in the current year.

Source: BankingDay