Why you could be paying too much for your banking

There's always a lot of noise when it comes to rate cuts on home loans.

And while it's expected that saving accounts will fall in line with cash rate movements, little noise has been made about some of them falling even before lenders have passed on rate cuts to their home loans. As for credit cards, they remain an interest rate rort - around 7.5 times the cash rate.

While institutions often say there's no link between the Reserve Bank of Australia's cash rate and what they charge for credit cards, their actions say otherwise.

Data from financial comparison site ratecity.com.au shows that when the RBA increased the cash rate in November 2010, 183 cards increased their rate. When rates came down in late 2011, 90% of credit card rates stayed on hold.

I can understand why so much focus is on home loans - they're big-ticket items.

But right now competition among mortgage lenders is fierce, which means it would be pretty hard for you not to get a great home or investment loan from just about any lender. The same can't be said for credit cards, personal loans and saving accounts.

It's fair to say that the RBA's past nine consecutive cash rate cuts, totalling 2.5%, have had little impact on personal loans and credit cards but a big impact on saving accounts, with some institutions, according to finder.com.au, dropping saving rates by more than the Reserve Bank's February 0.25% cut.

This means that consumers need to keep track of more than just home loans. As I mentioned in last month's banking column, home owners could sit back, continue to maintain their repayments at current levels and still save more than $20,000 over the life of a 30-year loan, thanks to the cut.

But "sit back" with any other financial product and you may end up paying more or earning less than you planned.

Take online savers. According to ratecity.com.au data, the interest rate spread between the highest-paying and the lowest-paying online saver is 3.75%.

The spread between the average rewards credit card and the cheapest credit card is a massive 8%. Annual credit card fees have also increased - from $90 to $97 in one year.

The problem for consumers is that most of us get our core products with the one institution.

The fact that package home loans are the most popular type of home loan sold may have a lot to do with that. In return for getting a discount on our home or investment loan, we are expected to open several other financial accounts.

Even if you do apply for a promotional product with another institution, chances are that, after the promotional period, you'll end up staying with that product rather than chase the best deal again.

Just because you're getting a good deal on your home loan doesn't mean the rest of your financial products are competitive too.

By all means keep your home loan where it is if you're happy with it but don't be complacent with the rest.

According to Monetise (a new money-saving platform that benchmarks consumers' financial health against the market and recommends products, based on an algorithm), consumers could do much better financially with the group of products they currently have.

At this stage the service is free and no kickbacks are received by Monetise on the products it recommends.

Although only three weeks into its launch, its customers' insight shows an "M score" of only 42. The M score indicates how close consumers' current products are to the best in the market, with 100 being a perfect score.

Since its launch, Monetise claims to have found its customers a combined $1 million in savings, either in overpaid fees or missed interest.

Money advises you to read the terms and conditions of any money-saving platform before you join; and you need to be comfortable in providing personal financial details to a third party.

But the main point here is that we are clearly complacent about our financial products and institutions rely on us being too lazy to move.

Best you do a quick review on exactly what you're earning or paying on all your banking products.

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