Finance Globe

U.S. financial and economic topics from several finance writers.
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ATM Fees More Expensive Now Than Five Years Ago

It’s rare to find a good or service for which the price stays the same over a period of time. ATM fees are no exception. If you’ve ever used another bank’s ATM to withdraw cash from your checking or savings account, then you know you pay a surcharge, or fee, for that transaction. According to a recent report from the Government Accountability Office, the average ATM surcharge has increased by 20% over the last five years.

In 2007, the average ATM fee for an out-of-network banker was $1.75 per transaction. In 2012, the average fee had risen to $2.10. Many of the larger banks, like Bank of America and Chase, charge $3 for non-customer who use their ATMs. Fees are often higher in places like airports, bars, and gas stations, where there isn’t much competition. Commenters on a New York Times blog on rising ATM fees say they’ve seen the fee as high as $7.50 in some places.

What’s worse, as you probably already know, is that you get hit with two fees, one from the bank whose ATM you’re using and one from your own bank. There are a few friendly banks that don’t charge fees when their customers use out-of-network banks. And a minority of the banks are generous enough to refund ATM fees charged by those other banks.

Banks are no longer required to disclose fees on the outside of the ATM. So now, you’ll have to initiate the transaction to figure out what you’re going to be charged. Fortunately, you’ll also have the opportunity to cancel the transaction and get your cash another way.

Paying an ATM fee every now and then, like once a year at a maximum, won’t hurt your pocket as much. But, if you’re paying these fees several times a month or week, it adds up. Two visits per week to an out-of-network ATM could cost more than $200 a year based on average fee amounts. It could be more if the ATM you’re using charges a higher than average fee and if your bank also charges a fee.

Bank accounts are getting more expensive, in general, with fewer banks offering totally free checking accounts. Add monthly ATM fees to any other maintenance fee and your account becomes much more expensive.

The good news is that ATM fees are completely avoidable for consumers with bank accounts. You can use your own bank’s ATMs even if that means driving a little further than you’d like. Choose a nationwide bank with branches all over the country if you’re a frequent traveler. Or, withdraw the cash you need before you travel. Download your bank’s smartphone app to figure out if there are ATMs located near you or along your route. Don’t forget that you can often get a limited amount of cashback at a grocery store or drug store.

Sources: CNNMoney.com, NYTimes Buck Blog
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Friday, 15 November 2019

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