Published at: 3/16/2017 4:28:40 PM
No matter whether you’re in the market for a home loan, term deposit, savings account or credit card, shopping around is a smart strategy. It can provide valuable savings, help you score a better deal, and give you the satisfaction of knowing you’ve got the product that’s right for you.
The trouble is, with so many providers to choose from, shopping around can be both time consuming and confusing. That’s where comparison sites like Finder, Mozo, Rate City and Infochoice provide a handy solution. They gather information about a wide range of products in one spot, providing a quick and easy way to see what’s available.
Four benefits of comparison sites
In fact, consumer watchdog – the ACCC , found comparison websites help consumers in four key ways:
But along with the benefits, there are a few traps with comparison sites. Check out our seven tips to make the most of what they offer.
No single comparison site covers every provider or product. To really trawl the market, visit a number of comparison sites before settling for a particular product.
Sure, you’ll prefer the format of some sites over others, but it only takes a few minutes to cast your net wide. You could find a hidden gem on a site that’s not top of your list.
Comparison sites make money in several ways, and one of them is sponsorship, where providers pay to have their product singled out as “pick of the day” or be given a high rank among the listings. Even where “top picks” are genuinely selected by the site organisers, you can’t be sure the criteria used matches your needs.
To give yourself the benefit of impartial choice, opt out of the function that favours sponsored listings to see an unbiased ranking of the most competitive products.
Comparison sites rank products according to a particular default setting. Home loans for instance, are typically ranked by the headline interest rate. For a home loan interest rate comparison that shows the true cost of a loan, select the option that ranks loans by their comparison rate, which incorporates most upfront and ongoing fees.
To compare term deposits, check that the default value of funds invested – and the savings term – match your own situation. It’s a similar story if you’re looking for the best credit card deals. The default setting could be the card’s annual fee. That may be fine if you pay off your card in full each month. However, if you’re trying to clear an ongoing balance, select the option that ranks cards by interest rate.
Plenty of financial products offer short term sweeteners, which can push them to the top of the rankings. Scratch the surface of these deals though, and it can all look a bit meh.
Bonus rates on savings accounts for instance, can seem very generous but they typically only apply for a few months. Instead, use the “base rate” to rank products because the best savings rate is often the one that applies consistently with no strings attached.
Comparison sites make it easy to focus on numbers – like the rate, the fees or the term. The thing is, features matter too.
When you’ve narrowed down a short list, use the site’s ‘compare’ function for a side-by-side look at the products including the features they offer. Follow up by visiting the bank’s website to read the fine print before making a final decision. Getting good value for money is all about finding the blend of features, flexibility and price that’s ideal for you.
Great customer service goes hand in hand with a good deal, and comparison sites can be very useful when it comes to discovering the sort of customer experience others have enjoyed with a particular bank. Don’t just rely on one or two reviews though. Check out half a dozen or so for a decent cross-section of opinions.
Sticking with the same financial products year after year can leave you out of pocket. Banks continually improve their products and change pricing, so make a habit of regularly browsing comparison sites to stay on top of the latest offers. It’s an easy way to know if that red hot deal you signed up for a few years ago is started to look a little lukewarm.
Price comparison sites offer plenty of pluses. And if you’re prepared to invest a bit of time reviewing several sites and use the information wisely, it’s possible to enjoy the best of both worlds – scoring a great deal with savings on time and money, plus the confidence of knowing you have the right financial product for your needs.