CONSUMERS have been advised to take steps to avoid being hit by bank charges that could be as high as €171 a year.
The call came in the wake of revelations by the Irish Independent yesterday that Ulster Bank is to end the automatic entitlement of its customers to free banking later this summer.
This means all six banks offering current accounts will now impose fees unless customers meet stringent conditions.
AIB is set to impose fees on its 1.5 million current account customers from Monday, unless they can keep a credit balance of €2,500 in their account each day, otherwise they will be hit with fees of €4.50 every three months, as well as transactions charges of between 20c and 30c each.
The move will mean that a householder who uses a debit card 10 times a week, uses their automated teller machine (ATM) card twice a week, and writes one cheque a week will end up paying €171.20 a year in fees and charges.
But consumers can avoid banking charges if they:
- Use their credit union for day-to-day transactions, as long as the credit union offers a debit or Laser card and has an electronic payments option.
- Stop writing cheques, as each one has stamp duty of 50c on it and a 30c transaction charge.
- Use online banking instead of branch transactions. Phone or internet banking is free with most banks, while branch transactions are expensive, according to the National Consumer Agency (NCA).
Consumers were also advised to minimise the number of times they use their debit card and their ATM card each week.
Availing of the cashback option with a debit (Laser) card is cheaper than making multiple withdrawals, the NCA said.
It is also possible to avoid transaction fees by using a credit card that is in credit, or one where the balance owed is always paid down during the interest-free period. This is usually 56 days.
Consumers can also avoid transaction charges by getting a pre-paid debit card, Simon Moynihan of Bonkers.ie said, with the best value being the Mastercard issued by Moneybookers, which has a €10 membership fee, but no top-up or transaction charges.
- Charlie Weston Personal Finance Editor