Credit card fees cost households $1.5 billion last year.

Comparison website RateCity has crunched the numbers to find people are unnecessarily handing over money for all types of products, from credit cards and home loans to savings accounts and every day banking accounts.

The combined $4.33 billion in fees — an increase of 3 per cent, or $121.7 million, from 2014 — were avoidable either by avoiding late payments, or switching to products that charge no ongoing fees.

“Bank fees are easily overlooked but they can quickly add up to thousands of dollars every year,” RateCity money editor Sally Tindall said. “The real shame is that these fees are largely avoidable, with thousands of fee-free options available.

“Take credit cards, for example. All the annual fees, late payment fees and cash advance charges added up to $1.51 billion haul for banks last year. That’s an additional $93.7 million wasted on credit card fees compared with the previous year.

“Home loans fees accounted for the second largest slice of fee revenue last year, at $1.25 billion, which was $32.5 million more than we spent in 2014.”

According to RateCity, credit card annual fees and charges can range up to $1200, but there are 29 cards on the market that charge no fees. Some home loans can charge up to $750, but there are 761 mortgages available with no ongoing fees.

Customers can fork out up to $575 in fees for personal loans, despite there being 24 zero-fee options on the market. Transaction and deposit accounts can charge up to $120 a year, but there are 67 no-fee options.

“Banks rely on the fact that we set and forget with our banking products,” Ms Tindall said. “Have a look at what you’re being charged and see how it stacks up to the competition — in most cases you’ll be able to switch to accounts that don’t charge any fees at all.”

In a report earlier this month, the Australian Bankers’ Association argued the average weekly bank fees paid by Australian households had remained steady.

According to the ABA’s annual report, ‘Fees for banking services’, households are paying an average of $9 a week in bank fees.

With total household spending continuing to rise, the ABA says bank fees have fallen to less than half of one per cent of total household spending — a 17-year low.

“The past six years has seen low growth in bank fees,” ABA chief executive Steven Münchenberg said.

“More people are using fee-free and low-fee transaction accounts, which has led to significant falls in bank fees from transaction accounts. Fees on transaction accounts have fallen by $1 billion since 2008 while the fees paid per household for these accounts is lower that what it was in 1999.”

Mr Münchenberg said fee growth over the past year had largely been driven by increased volumes — banks provided more than 900,000 new home loans and there were half a million new credit card accounts.

“Fees as a proportion of the value of all home loans is now at the lowest level in 15 years,” he said. “Reserve Bank of Australia data shows that per credit card, annual fees have fallen over the past year, as have late payment and over-the-limit fees.”

The ABA says fees on transaction accounts are now at their lowest level in 15 years. “Fees have fallen by $1 billion or 51 per cent since the peak in 2008, yet the number of transactions has increased by around 60 per cent over that same time,” ABA chief economist Tony Pearson said.

Mr Pearson argued the latest RBA figures show the fees are “well contained” and at record low levels as a proportion of banks’ income, profits and assets.

THE TRUE COST OF BANK FEES

• Credit cards: $1.51 billion

Up $93.7 million (7 per cent)*

Fees range from $0 —$1200

29 zero-fee options on the market

• Home loans: $1.25 billion

Up $32.5 million (3 per cent)

Fees range from $0 —$750

761 zero-fee options on the market

• Personal loan fees: $375.7 million

Up $9.8 million (3 per cent)

Fees range from $0 —$575

24 zero-fee options on the market

• Transaction and deposit accounts: $1 billion

Down $19.6 million (2 per cent)

Fees range from $0 —$10 per month

67 zero-fee options on the market

• Total household fees: $4.33 billion

Up $121.7 million (3 per cent)

Source: RateCity/RBA

*Increase since 2014