Forget card surcharges, these three invisible fees are costing us more
While the average foreign transaction fee is 3 per cent, it can go as high as 5 per cent. And besides this card-issuer fee, payment networks like Visa, Mastercard, and American Express may also charge their own international transaction fees, which can be up to another 1 per cent.
Card surcharges are rarely levied on online purchases, because of the no-cash-no-card-charge rule, but per $100 purchase, you can still easily forgo $4 for, well, nothing.
Various cards now offer foreign-exchange-fee-free transactions. And a new alternative is to maintain a travel money card at all times for overseas purchases. These are purpose-designed debit cards with favourable exchange rates for money pre-loaded onto them in other currencies.
The cost of that exchange is usually not explicit. Instead, it's built into the conversion rate you get. (Such cards also usually spruik no- or low-cost ATM withdrawals overseas.)
The problem I've found with travel cards, especially when you travel, is if you incorrectly estimate what you'll spend, currency stuck on such a card becomes a conundrum. Do you wait until you next visit that country? Travel card companies pick up a pretty penny if you leave money languishing, in interest.
Loading
But you'll wear a double conversion cost if you instead switch the money again into another currency, maybe Australian dollars. Which brings me to the enormous amount you might not realise you are paying from your superannuation and investments.
3. Investing, whether in or out of super. Hidden trailing commissions on your investments, which came straight out of your fund balance, were banned many years ago now. These were rivers of perennially flowing gold for financial advisers.
But guess what? Asset-based fees were not banned. And if there was an adviser in the mix of any investments, these may lop off the top of your money, too. However, there is another layer of charging we all pay: fund management fees.
These vary significantly depending on the level of management of your investments – or superannuation fund. An average amount would be 1.5 per cent – or $1500 on a $100,000 balance.
Which might be fine … but check, when your super performance for last financial year is released (any day), whether your returns made your fees worth it. If you're paying more for 'highly active' management, are you getting higher returns?
Now, also coming out of your super fund will be insurance premiums, but I generally support these – they're cheap, and the insurance is a great safety net. You'll have a default level of life and total and permanent disability insurance. You may also be able to get limited income protection insurance on request.
Hidden fees are a fact of life in our financial system – and you can bet they're about to be re-hidden when it comes to card purchases. Just never obliviously hand over more than you need.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
West Australian
20 minutes ago
- West Australian
ASX falls for third straight session on banks and miners
A slump in the price of iron ore and Australians dumping their bank stocks saw the local market slide for the third straight trading day. The benchmark ASX200 dropped 42.5 points or 0.49 per cent to 8,666.9 points on Friday while the broader All Ordinaries lost 45.10 points or 0.50 per cent to close the week at 8,934.30. Australia's dollar also fell and at the time of writing was buying 65.76 US cents. The falls were broad based with seven of the 11 sectors ending the day in the red, led by the materials, financials and healthcare sector. BHP shares fell 1.92 per cent to $40.80, Fortescue shares dropped 3.42 per cent of $18.35 and Rio Tinto traded down 0.83 per cent to $118.86 on the back of a falling iron ore price. Singapore iron ore futures slumped 1.7 per cent to $103.35. The drop follows investors fear of an oversupply of the commodity. The big four banks continued their sell-off with CBA down 0.35 per cent to $172.87, NAB down 0.40 per cent to $37.51, Westpac slumping 0.78 per cent to $33.03 and ANZ down 0.72 per cent to $30.22. Market heavyweight CSL also fell 0.61 per cent to $267.92, while Sigma Healthcare lost 0.70 per cent to $2.84 and Cochlear slid 0.38 per cent to $312.83. AMP chief economist and head of investment strategy Shane Oliver said the Australian market fell during the week even though Wall Street continued to reset record highs. 'Resources and health stocks rose but this was more than offset by falls in consumer and financial shares, with CBA coming under after it nearly doubled in price over two years,' he said. Dr Oliver said the Australian sharemarket was still on track for a solid July up 1.4 per cent so far although the gains could be short lived. 'With lots of good news already factored in and valuations stretched, markets are a bit vulnerable to a correction over the seasonally weaker months of August and September with a long worry list,' he said. Shares in anti-drone technology business DroneShield slumped 10.09 per cent to $3.03. This was on the back of no announcement and could be investors taking profit after the shares surged more than 300 per cent so far this year. Bapcor shares gained 1.64 per cent to $3.72 following after tanking nearly 30 per cent to a five-year low on Thursday on the back of its latest earnings forecast. The Autobarn and Midas owner said statutory net profits after tax would lie between $31m-$34m. Specialist alternative investment manager Regal Partners surged 9.02 per cent to $2.90 after announcing a 7 per cent increase in funds under management to $17.7bn. Shares in Newmont also shined, gaining 3.81 per cent to $95.38 after the US gold miner announced a 9 per cent rise in net income for the second quarter and a $4.6bn share buyback program.
Perth Now
20 minutes ago
- Perth Now
ASX drops on banks and miners
A slump in the price of iron ore and Australians dumping their bank stocks saw the local market slide for the third straight trading day. The benchmark ASX200 dropped 42.5 points or 0.49 per cent to 8,666.9 points on Friday while the broader All Ordinaries lost 45.10 points or 0.50 per cent to close the week at 8,934.30. Australia's dollar also fell and at the time of writing was buying 65.76 US cents. The ASX 200 fell for the third straight day of trading. NewsWire / Christian Gilles Credit: News Corp Australia The falls were broad based with seven of the 11 sectors ending the day in the red, led by the materials, financials and healthcare sector. BHP shares fell 1.92 per cent to $40.80, Fortescue shares dropped 3.42 per cent of $18.35 and Rio Tinto traded down 0.83 per cent to $118.86 on the back of a falling iron ore price. Singapore iron ore futures slumped 1.7 per cent to $103.35. The drop follows investors fear of an oversupply of the commodity. The big four banks continued their sell-off with CBA down 0.35 per cent to $172.87, NAB down 0.40 per cent to $37.51, Westpac slumping 0.78 per cent to $33.03 and ANZ down 0.72 per cent to $30.22. Market heavyweight CSL also fell 0.61 per cent to $267.92, while Sigma Healthcare lost 0.70 per cent to $2.84 and Cochlear slid 0.38 per cent to $312.83. AMP chief economist and head of investment strategy Shane Oliver said the Australian market fell during the week even though Wall Street continued to reset record highs. 'Resources and health stocks rose but this was more than offset by falls in consumer and financial shares, with CBA coming under after it nearly doubled in price over two years,' he said. Dr Oliver said the Australian sharemarket was still on track for a solid July up 1.4 per cent so far although the gains could be short lived. 'With lots of good news already factored in and valuations stretched, markets are a bit vulnerable to a correction over the seasonally weaker months of August and September with a long worry list,' he said. Seven of the 11 sectors finished in the red. NewsWire / Max Mason-Hubers Credit: News Corp Australia Shares in anti-drone technology business DroneShield slumped 10.09 per cent to $3.03. This was on the back of no announcement and could be investors taking profit after the shares surged more than 300 per cent so far this year. Bapcor shares gained 1.64 per cent to $3.72 following after tanking nearly 30 per cent to a five-year low on Thursday on the back of its latest earnings forecast. The Autobarn and Midas owner said statutory net profits after tax would lie between $31m-$34m. Specialist alternative investment manager Regal Partners surged 9.02 per cent to $2.90 after announcing a 7 per cent increase in funds under management to $17.7bn. Shares in Newmont also shined, gaining 3.81 per cent to $95.38 after the US gold miner announced a 9 per cent rise in net income for the second quarter and a $4.6bn share buyback program.
Perth Now
20 minutes ago
- Perth Now
Audi Australia culls more passenger cars in increasingly SUV-heavy lineup
The Audi A7 Sportback and S8 limousine are the latest passenger models from the German luxury brand to become unavailable to order in Australia. Audi Australia has updated its website to confirm orders for the large five-door liftback and even larger four-door sedan are now closed. While the A7 is at the end of its lifecycle – it's understood the latest A6 replaces both the outgoing A6 and A7 – the S8 hasn't been discontinued globally. The S8 also continues to be offered in the UK, another major right-hand drive market, as well as in its home market of Germany. CarExpert can save you thousands on a new car. Click here to get a great deal. Supplied Credit: CarExpert ABOVE: Audi A7 However, the A8 and S8 family entered production late in 2017, which means they're close to a decade old now, and yet no replacement has been announced, combustion-powered or otherwise. 'The S8 is no longer available in showrooms at this stage,' confirmed an Audi Australia spokesperson. 'While the A8 range is currently unavailable, the Audi Australia team constantly evaluates all models available to us from the factory, ensuring that we have a broad range of models available here to meet customer's needs.' The removal of the A7 and S8 from Australian order books comes after the 'regular' A8 was retired locally, and orders were closed for the high-riding A6 allroad wagon, the S6 sports sedan and the S7 Sportback after the 2024 model year. That leaves Audi's large passenger model range consisting of only the high-performance RS6 Avant and RS7 Sportback, plus the outgoing A6 sedan and the recently updated S and RS e-tron GT electric sedans. If you want a large, combustion-powered Audi without the RS treatment, you now have just one option: the A6 45 TFSI quattro S line, priced at $124,950 before on-roads. Supplied Credit: CarExpert Supplied Credit: CarExpert ABOVE: New-generation Audi A6 (left), outgoing model (right) A look at Audi's German website confirms the outgoing A6 and A7, including their sportier S and RS variants, are no longer available to order. Audi is replacing the outgoing A6 with a new-generation sedan and Avant wagon based on the company's Premium Platform Combustion (PPC), which will be complemented by the electric A6 e-tron and A6 Avant e-tron based on the Premium Platform Electric (PPE). Both of these model lines are already on sale in Europe but Audi has yet to officially lock them in for Australian release. Instead, it says these vehicles are 'currently under evaluation for the Australian market'. 'Our product team are constantly evaluating each model line and the specific models within the range to determine the mix, pricing, and specification for everything we offer here in Australia,' said the spokesperson. Should Audi not bring the new-generation A6 to Australia, including its inevitable hotted-up RS flagship, the recently launched A5/S5 would become the brand's largest combustion-powered passenger car available in Australia. Supplied Credit: CarExpert ABOVE: Audi S8 The discontinuation of the S8 locally now leaves Audi without a model in the so-called 'Upper Large' passenger car segment, which also contains vehicles like the rival BMW 7 Series, Lexus LS and Mercedes-Benz S-Class, after 30 years. Audi delivered just three S8s in the first half of this year, but even looking at full-year sales of the A8/S8 in 2024 – when the flagship was still available to order – it notched up only 10 deliveries, down 47.4 per cent on the previous year and behind the LS (11), S-Class (43) and 7 Series (49). It isn't just the Upper Large segment from which Audi is withdrawing. The four-ringed brand no longer offers any coupe or convertible models, neither here nor abroad, following the axing of the R8 supercar and TT sports car, and the introduction of the new-generation of A5 without any two-door variants. MORE: Everything Audi A6 • S6 • RS6 • A7 • S7 • RS7 • A8 • S8
