Trending Financial News 22 January 2020

How much are credit card and Eftpos fees?

When you pay with a credit or debit card in-store the merchant may add a card surcharge to the final bill.  Australian retailers are allowed to surcharge customers for the costs associated with accepting card payments but are not permitted to profit from card surcharges. Visa or Mastercard credit card purchases are typically surcharged around 1.6% with Visa or Mastercard debit cards being surcharged less.

  • For Visa and Mastercard credit cards, this is usually around 1.63 percent.
  • American Express cards are often surcharged more – up to around 2.0 percent.
  • Visa and Mastercard debit cards are often surcharged at around 0.63 percent.
  • Eftpos cards may charge the retailer about 20 cents per transaction so for smaller transactions, many retailers may ask for an Eftpos surcharge.

Judo Bank hits $1B in deposits

Judo Bank is just 9 months old but has already attracted over $1 billion in term deposits. Judo uses the deposits to fund loans to small businesses, starting from $250,000. 

Judo Bank’s Patrick Nolan said he was delighted to reach the $1-billion mark in deposits despite limited marketing.

Judo Bank currently has some of the market-leading term deposit rates on terms from 3 months to five years. Read more about the top term deposit rates now available in January 2020.

“Many of our customers is they want to contribute to the economy by helping Australian small businesses grow and create more jobs,” he said.

Earlier this week, Judo Bank announced its loan originations for SMEs had surpassed $1 billion. Mr Healy had stated that about 95 per cent of the funds being loaned to SMEs had come from term depositors in Judo.

Fee comparison: Shopping with cash vs shopping with card

76 per cent of Australians do not know how much they spend on bank fees. ATM fees in Australia have been slashed since 2017 but more and more Aussies don’t cash out their pay at ATMs.

Many Aussies are spending their pay via Tap n Go, PayWave or Eftpos and possibly don’t realise how much they are paying for the convenience.  Retailers and other merchants are allowed to surcharge customers to recoup the cost of providing card payments.

You may be surprised to learn how much you could be paying in card charges to tap, tap, tap your shopping.

Read more about shopping with cash vs shopping with a card at InfoChoice.

How much are ATM withdrawals in Australia?

Since 2017, banks have slashed Automatic Teller Machine withdrawal fees and now most ATM transactions in Australia are fee-free. Even cash withdrawals made at ATMs owned by other banks are fee-free. So, a Westpac customer can withdraw their own cash from an ANZ Bank ATM for free, for example.

Only independent (non-bank) ATM operators now charge withdrawal fees – around $2.50 to $5.00 per withdrawal. Some machines charge more, if they are located in or near hotels, casinos, convenience shops or in remote areas.

What fees do I pay for Apple Pay and Google Pay purchases?

Apple Pay and Google Pay fees are paid by your bank and included in your monthly account keeping fee or other fees collected by your bank. Using Apple Pay or Google Pay can attract a fee levied by the merchant on your credit card.

These fees are often in the range of about 1.6 % of the purchase price. Read more about shopping with a card and shopping with cash and the fees you could be charged for tap, tap tapping away your shopping at InfoChoice.

First Home Buyers can save more by comparing

Up to ten thousand home buyers will be helped into their first home loan in 2020 by the federal government’s First Home Loan Deposit Scheme, currently available on loans sold by Commonwealth Bank and National Australia Bank.

All First Home Loan Deposit Scheme borrowers will have low deposits (under 20% LVR, as low as 5% LVR). There are lenders with loan rates for first home buyers with small deposits that are lower than the Commonwealth or the NAB’s rates. That includes Well Home Loan’s 2.96% pa comparison rate on loans with 90% LVRs.

First Home Loan Deposit Scheme borrowers face higher repayments

Up to ten thousand first home buyers with small deposits will be helped into their first home loan in 2020 by the federal government’s First Home Loan Deposit Scheme.

“First Home Loan Deposit Scheme borrowers face higher repayments than borrowers with bigger deposits,” said Vadim Taube, Chief Executive Officer of InfoChoice.

“So, it’s important to get a competitive rate and big banks often give discounts to smart borrowers who have compared the market and know what the best deals are,” said Vadim Taube.

 “If you are applying for a first home loan deposit scheme home loan through CBA, NAB or one of the other lenders who will come on board in February, make sure you have compared their loan rates with the best in the market,” said Vadim Taube.

First home buyers can save $10K by comparing

A first home borrower with just 10 per cent deposit could save $10,000 or more over the life of a 25-year loan by choosing a cheaper loan said Vadim Taube, CEO of InfoChoice.

For owner-occupier borrowers on a  $500K 25-year variable P&I loan, the difference between the most competitive rates and the most competitive major lender variable rates is worth over $35 per month in repayments according to the InfoChoice Refinance Calculator.

“First home buyers face higher repayments because of a low deposit.

“First home buyers can save plenty each month and over the life of their loan by comparing rates,” said Vadim Taube.

“Talk to your lender, let them know that you know the best rates in market are less than what they’re currently charging.”

Banks cut fixed rate mortgage rates in January 2020

Lenders are slashing fixed home loan rates in recent months. Two-year fixed rates are particularly competitive right now.

Commonwealth Bank and National Australia Bank have two-year fixed rate home loan specials for first home buyers and owner occupiers.

Commonwealth has a 2.99% pa rate (comparison rate 4.47% pa)

NAB has a 2.98% pa rate (comparison rate 4.34% pa).

Well Home Loans has a 2 year fixed rate of 2.68% pa, (OO, P&I,  comparison rate 2.75% pa) with a maximum LVR of 90%.

Compare 1800 Australian home loans from 145 institutions.

20 variable rate mortgages under 3% in January 2020

There are 20 variable rate mortgage products for owner-occupiers paying principal and interest now with advertised rates under 3.0 per cent pa, according to InfoChoice (see table below).

The Reserve Bank is expected to cut rates by up to 0.5 percentage points in early 2020.

Most borrowers choose variable rates and the RBA has signalled that rates are heading down in 2020.

New neobank starting up

Australia’s first neobank to receive an unrestricted banking license, Volt aims to have a full range of consumer deposit and loan products in the market before the end of 2020, CEO Steve Weston told Australian Broker.

Volt has a ‘no catches’ savings account with a 2.15% per annum variable interest rate that is available to a selected wait list of early customers. Volt will launch to the public after beta testing is successfully completed.

Compare savings accounts at InfoChoice.

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