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Banks' fees back on the rise thanks to credit cards and personal loans

Households paid more in bank fees in 2013 for the first time in four years, as lenders received higher fee income from personal loans, credit cards and deposits.

Total bank fees rose 2.6 per cent to $11.6 billion last year, new Reserve Bank figures showed on Thursday. But unlike previous years the increase was more evenly shared between houseshold and business customers of the banks.

After falling for three years following the global financial crisis, household bank fees rose 2.3 per cent to $4.1 billion, mainly due to higher fees for personal loans and credit cards.

The Reserve reported that credit card fee income rose 4.1 per cent to $1.36 billion, as the value of credit card spending and the number of cards rose.

Personal loan fees also increased 7.5 per cent to $341 million amid higher volumes and some higher charges, while deposit fees rose due to an increase in ''exception'' fees, which include charges for overdrawing an account or writing a cheque that bounces.

Fees levied on businesses rose 2.8 per cent to $7.5 billion, which was less than half the pace of last year, as competition for corporate borrowers intensified.


The chief executive of the Australian Bankers' Association, Stephen Munchenberg, said bank fees had risen in response to stronger economic conditions, and the increase was smaller than growth in wages.

"Last year, households paid around $1 billion less in fees than 4 years previously.  They are paying less in fees for bank accounts, home loans, personal loans and credit cards than in 2009," Mr Munchenberg said.

In part, the fall in fees after the global financial crisis was caused by banks sharply reducing their dishonour fees for customers who overdraw their accounts or pay their credit cards late, following a class action over the issue.

There was also a lift in competition on bank fees after National Australia Bank cut a range of charges in 2009, as part of a push that also involved offering lower standard-variable mortgage rates.