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A LITTLE curiosity goes a long way if you want to save money at your financial institution.

There’s a good chance you’re paying too much for financial services. Asking a few direct questions may get some of that cash back.

Canstar spokeswoman Justine Davies says there are a lot of useful things your bank could tell you if you just ask.

‘It’s really frustrating that, in the competition to win new customers, banks can sometimes forget to look after their existing customers,’ she says.

Here are five questions to get the ball rolling.

1. HOW LOW CAN YOU GO ON MY MORTGAGE?

Davies says mortgages are most people’s biggest debts and small interest rate changes make big differences. Canstar’s database shows a two per centage point difference between the lowest and highest rates.

‘Half a per cent saving on a $300,000 mortgage could be around $90 a month, so jump online, see what’s on offer in the market, then ask your bank to match it,’ she says.

‘Even if they can’t match it, you might be able to negotiate a much lower rate.’ Follow the same process to boost term deposits and online savings account interest rates.

2. WHY DOES MY CREDIT CARD COST SO MUCH?

Australia’s average credit card interest rate is an exorbitant 17 per cent. Banks don’t often tell customers about low rate options – under eight per cent – or zero-interest balance transfer cards, Davies says.

‘Ask your bank to work out for you the cheapest way of repaying your debt.’

Consumer finance specialist Lisa Montgomery says you should ask if your credit card is the right one for your spending patterns.

‘Banks have a range of products, whether you’re collecting reward points, paying it off every month, or (you’re) a revolver who is left with a balance every month,’ she says.

3. WHAT IS MY LOYALTY WORTH TO YOU?

It’s much cheaper for banks to hold onto existing customers rather than go out and fight for new ones, so use this to your advantage.

‘Ask if they would give you discounts if you brought more financial products to them,’ Montgomery says.

‘Is there a discount if you make them your major financial institution? Ask them what sort of value they’re going to add.’

4. HOW CAN I GET AHEAD?

Building wealth delivers you a secure retirement and the ability to pay for life’s rich experiences, and financial institutions are experts in money matters.

Montgomery says you should ask if they have any suggestions about creating a wealth plan. ‘Often with lenders and customers it’s a bit of a set-and-forget mentality and we don’t realise we can create wealth with them,’ she says.

Most banks and credit unions have financial planners, but watch out for slick sales tactics, and speak to different planning businesses before deciding on one.

5. SHOULD I LOOK AT YOUR PACKAGES?

Many banks offer package deals where you can bundle home loans, credit cards and transaction accounts into one package for an annual fee, which may cost around $400 but the interest and fee savings far outweigh the cost.

‘Your bank should be able to look at all your current costs and give you an estimate of how much you would save on a package,’ Davies says. Originally published as Five questions you need to ask your bank


Posted by Anthony Keane – News Corp Australia Network on 29th January, 2016