Are you wasting hundreds of dollars?

Save money on finance

Spring is a great time to review your finances and if it’s something that you haven’t done for a while then you could potentially be wasting thousands of dollars a year by paying higher insurance premiums, banking fees and interest rate margins.

Many of the financial products we own – from bank accounts to credit cards, home loans, car insurance, home and contents as well as health insurance – are set and forget products. Canstar Blue research has found that most of us are happy with our financial institution – but that fees and charges was the area in which we were least likely to be satisfied

Sometimes, of course, you don’t need to switch financial institutions – you just need the knowledge of what else is available, to give you that competitive negotiating edge.

Could you save thousands?

Here are a few financial products that you could potentially save money on this year.

Please note that any calculations below are indicative only.

Some savings possibilities include…

Credit cards

A family with two credit cards containing an ongoing balance of $5,000 per card could potentially save themselves almost $350 per card in fees and interest charges by switching from an average-priced card to a low-rate card.

Here’s an example:

Product Scenario High rate % Low % Average fees Low fees Current cost Possible savings
Rewards credit card $5,000 balance 20% 13% $120 Nil $1,000 $350

Based on indicative low and high interest rates on cards on Canstar database.

Transaction Accounts

Assuming the family have a couple of transaction accounts each – two they use very frequently and two they don’t use quite as often – there are savings to be made here too.

Here’s an example:

Scenario Possible annual fees Low annual fees Possible savings
High use transaction account $180 Nil $180

Based on CANSTAR’s High Transactor  and Low Transactor profiles. Includes account keeping fees and transaction accounts.

Health Insurance

The cost for equivalent health insurance policies can vary; it’s worth shopping around.

When Canstar Blue asked New Zealanders recently why they hadn’t switched Health insurance providers, 52% stated outright it was because they are happy with their current health insurer. For some though, it came down to perceived difficulty, with 19% of survey respondents saying that it’s too difficult to switch, and 19% having a joint / family policy, and being unwilling to make the decision on the part of others.

Home loan

Your home loan may be the biggest debt you ever have, so small differences in interest rate can have a big impact on the cost of your loan.

Here’s an example:

Scenario Average % Average annual cost Low % Low annual cost Possible savings
$400,000 loan 5.90% $30,636 6.10% $31,224 $588

Based on floating home loans available for $400,000 and at loan to value ratio of 80%.

Why not set yourself a goal to review each of your financial products, one at a time, to see if you can save money without impacting on the quality of your product.

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