Different ways to pay

Save money by paying differently

Normally we don't think much about the way we pay for things. But did you know that if you pay by EFTPOS or cheque, you could be charged a transaction fee? These fees can add up over time and make a dent in your savings.

Next time you buy those new books, shoes or CDs, consider your payment options to reduce your fees and charges.

Paying by cash

Cash is usually the cheapest way to pay because you know exactly how much you have to hand over. With other ways of paying, you don't know the real cost until you get your statement from your bank.

However, accessing cash can be expensive. Your bank may charge a withdrawal fee at their branches or ATMs, and it can be even more expensive if you use another bank's ATM. Find out how many withdrawals you can make before you are charged a fee and how much the withdrawal fee is.

Paying by EFTPOS

Some banks charge you each time you make an EFTPOS transaction and this can add up to quite a lot over a year.

Smart tip

Ask for 'cash out' when using EFTPOS. That way you only pay one fee for two transactions.

For example, Maria goes shopping twice a week and pays for her groceries, fruit and meat with EFTPOS. Her fees add up to $3 a week - more than $150 a year. And that's just for groceries. Her fees will increase each time she uses EFTPOS to pay.

If you like the convenience of paying with EFTPOS, check that your transaction account is right for you. Some banks don't charge anything for paying by EFTPOS and others may include it in the monthly account keeping fee, or provide you with a set number of free transactions per month. For more information see transaction accounts.

Find out more about contactless cards that you just wave or tap to purchase an item.

EFTPOS chargeback

Selecting 'credit' rather than 'cheque' or 'savings' as the account type on an EFTPOS purchase may give you extra protection if you don't receive what you bought. You can ask your bank for a chargeback.

A chargeback is a return of funds from a retailer, or a service provider, to your bank account or credit card, often initiated by your bank. When the bank has investigated, it may reverse the transaction - meaning you get the money back. However, it depends on the circumstances. Check with your bank.

Paying online

Many businesses allow you to make payments online through your bank like 'Pay anyone' or BPAY. Find out more about online and mobile phone banking and shopping online.

Paying by cheque

Depending on what the type of account you have, most banks will charge you for having a cheque account and paying by a cheque. If you write a cheque for an amount that is greater than what is in your bank account it is likely your bank will charge you a dishonour fee.

Smart tip

When you write a cheque, cross out the words  'or bearer' so it can't be cashed if it is stolen.

Make sure you understand all the charges you could incur and keep a close eye on your account to make sure you always have sufficient funds.

Paying by credit

This can be the most expensive way to pay for things because of high fees and interest rates. To find out more, go to credit cards.

Find out more about contactless cards that you just wave or tap to purchase an item.

Paying by lay-by

In some shops you may be able to lay-by your purchases. This is where you pay off an item over a certain period of time. The shop keeps the item until you've paid if off completely.

This is a good way to pay if you can't afford the item right away because shops don't charge you any interest (although there may be some fees and often a deposit is required). Make sure you know what happens if you make some payments but decide you don't want to pay the rest off. You'll need to find out if you will get your money back.

For more information about the lay-by laws in your state or territory, contact your fair trading organisation:

Gift cards

A gift card is a card loaded with an amount of cash. Find out more about gift cards.

Next time you pay for something, think how much you are actually being charged. If you like paying for things by EFTPOS or withdrawing money from an ATM in small amounts, make sure your account is giving you the best deal for making these transactions.

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Last updated: 06 Oct 2017