Want to be a few hundred dollars a year better off? You can by being a savvy banker - but it will take a bit of effort on your part.
Here are my top tips for keeping more cash in your back pocket:
Electronic transaction fees
Some eftpos and electronic transactions fees can be up to 40-50c a pop. So don't be apathetic. Phone your bank and ask if there is another account that allows you to use eftpos machines for free. If not, get cash when you buy petrol or groceries instead of withdrawing from ATMs.
I have shopped around so many times trying to figure out the cheapest way to get holiday cash. It's expensive whether you take wads of cash, use eftpos, credit or debit cards, or a pre-loaded travel card. But beware in particular of cash advances. You'll be hit with a triple fee from the local bank, your bank's cash advance fee, and currency conversion charges.
If you revolve on your card the only rate you want is the lowest. Or if you pay it off at the end of the month go for the lowest fee. If you can earn more rewards points than the annual fee and don't pay interest, make the most of your points by spending them on groceries, petrol or other day-to-day items that you would have bought anyway.
You can transfer your debt to a 0 per cent rate for 12 months at the BNZ currently. The trouble with this type of deal is that all new purchases are charged at between 13.90 per cent and 20.95 per cent. Cash advances are charged at 22.95 per cent. If you're clever, you transfer the debt, and cut up the card so you can't accidentally incur interest. Switch to another bank's 0 per cent offer at the end of your interest-free period.
Dishonour, and unarranged overdraft fees
These are the fees they hit you with if you dip into the red or further into the red than your overdraft limit. They're expensive and the most unfair thing is you can't opt out and ask for your payments to fail if you accidentally go to overdraw your accounts. The banks say they're doing you a service by letting the transaction go through and then hitting you with a fee. Phone or visit the bank and argue hard for the fee to be refunded. It works.
Collapsing interest rates
Older people who rely on term deposits and those saving for home deposits are worst hit by banks quietly dropping interest rates on former headline-grabbing accounts. When I wrote about notice saver accounts in February 2015 the rates from Kiwibank and Heartland Bank were superior to equivalent term deposits. Fast forward to this year and they've dropped well below equivalent term deposits. Always double-check your interest rates at least twice a year.
Banks' loan and guarantor documents are worded in such a way that you're guaranteeing that other person's borrowing in perpetuity. You have to actively cancel the "lien" (the fine print that has you by the goolies) when the debt is paid off. If not, you can be asked to cover the other person's debt years down the track. Mortgage broker Stuart Wills of the Mortgage Supply Company points out a mortgage broker can get banks to limit guarantees to either a set dollar amount or a timeframe.
Dipping into your savings
Banks can and do help themselves to your cash to pay off your loans even if you have other uses for the money. Case 49296 on the Banking Ombudsman's website is a classic example where a business owner was in financial trouble and sold some assets to release cash to keep his business going. Instead, the bank grabbed the proceeds to pay down his other lending. This happens to personal borrowers as well. So keep your savings and debt with different banks.
The best advice? Never be afraid to shop around.