Out of Network ATM Fees Hit All-Time High

According to Bankrate.com, the charge inflicted on banking customers who use out-of-network ATM fees is higher than ever, and continues to rise. The average fee now clocks in at $4.52, 4% higher than 2014’s average and 21% higher than the average out-of-network ATM fee in 2010.

This charge is enough to make consumers think twice about visiting a random yet convenient ATM outside of their banking network, especially when the amount to be withdrawn might only be $20. To access that $20 of your own money, you have to pay a fee of almost 25% – who wants to dish out those funds? Consumers may be tired of having to pay a bank in order to access their own money, but it doesn’t seem like the fees are going to decrease at any point in the future.

Banking Fees on the Rise

While this may come as a surprise to those who believe everything is more expensive in New York, Atlanta’s average fee – $5.15 – is the highest in the nation. New York comes in at a close second at $5.03. Phoenix, Miami and Milwaukee have the next three highest ATM fees reported, at $4.88, $4.84 and $4.78 respectively. San Francisco is the major city with the cheapest ATM fees, at $3.85.

While this is the ninth year in a row that ATM fees have risen, overdraft fees also continue to increase as well, as they have for 17 straight years in a row. Also, when Bankrate.com’s study examined the fees associated with non-interest checking accounts, they found only 37 percent of those accounts studied are actually fee-free. In 2009, 79 percent of these types of checking accounts were free. It’s clear that banks are adding fees left and right, then increasing the cost as time progresses – why?

What’s the Cause of the Price Increases?

After the financial crisis in 2008 and 2009, laws were passed to regulate the charges banks could inflict on consumers, specifically the costs charged to retailers when people pay for products with a debit card. So instead of being able to wring money out of the local businesses, banks pass the discrepancy in profit to the consumer. They might not be able to charge a business for your use of your debit card, so instead they charge you in roundabout ways.

As Usual, Lower Income Areas More Affected Than Others

While you may find it simple to just drive to your local bank and take out money in person or through your in-network ATM, not everyone has it that easy. People in low-income areas sometimes only have access to one or two local ATMs. When they need cash in a pinch, they are more likely to be hit with the high withdrawal fees you do your best to avoid. And unexpected high withdrawal fees charged out of necessity can lead to more overdrafts…putting more money in the bank’s pocket and taking it out of the consumer’s account. Lower income workers who live in an area with limited banking options will most likely continue to be the most affected by the hike in prices which seem to have no end in sight.

Unnecessary Expenses That You’d Probably Still Comfortably Live Without

90% of shoppers buy items not on their shopping lists- and indication that people tend to spend unreasonably. Despite the high cost of living, most working Americans are uninformed of their unnecessarily expensive spending habits. 42% of them cite commuting costs as their number one unnecessary expense, which according to them, should be sufficiently reimbursed by their respective employers. Shockingly, there are other very trivial but unnecessary expenses they unknowingly incur, which they would comfortably live without:

Buying Coffee On Your Way To Work

Several compelling reasons have been given to explain why you ought to buy a cup of latte in the morning as you head work. While this is a very convenient option, it has proven to be an unnecessary wallet-emptying habit.

Ashley Feinstein, a New York certified money coach, was shocked when she realized that her $4.30 latte each morning accumulated to an annual cost of $1200. She then decided to drink the free coffee at work and instead use the $1200 to take a family vacation to Spain.

Buying Lunch At Work

Two-thirds of working Americans spend about $2000 a year on lunch alone, instead of packing it. To curb this, experts advise people to carry packed lunch to the office. A simple calculation shows that carrying left over supper or sandwiches to the office is more profitable than buying lunch on a regular basis.

Satellite/ Cable TV

The average price for expanded cable service increased by 2.5% from 2013 to 2014, making cable TV more expensive.

Many Americans have discovered that this is an unnecessary expense, especially when Netflix and free streaming TV cost almost nothing. To put it in perspective, between 2010 and 2014, the number of people no longer subscribed to satellite or cable TV increased by 7.6 million households.

You could hesitate to eliminate this cost particularly when you consider the cons of cutting cable TV, but the truth is, most of the time, you only watch a small fraction of the hundreds of channels you pay for.

Gym Membership

Joining a gym is a fantastic way to get fit. Unfortunately, it can be quite expensive. Luckily for you though, this is not the only way to keep fit and maintain a healthy lifestyle.

In warm months like summer, gym membership is utterly pointless. Gym-free activities such as morning runs, city walks in the evening and practicing yoga at home are great ways of getting fit for free.

Buying A Second Car

The United States has a national average of 2 cars per household. This means that the family spends double the amount one person spends on fuel and car service a year.

Second cars especially for working families seem to be extremely important to ensure efficiency and convenience while going to work. While this is true, carpooling seems to be a better option. By strategically living in a central position, spouses can drop each other off at work in the morning and prevent the use of second cars.

To conclude, your spending habits can cost you a great deal. Forfeiting bought coffee and lunch alone every day could save you $3200 a year, cash that would tremendously help you cater to other important and necessary expenses.  You should ensure that you practice great discipline, self-control and pre-plan your expenditure.

Long Overdue Chips Can Finally Protect US Consumers — If Merchants and Media Stop Being Shortsighted

There’s been quite a bit of negative reporting on the new microchip credit cards issued to Americans recently. The new cards have a microchip that constantly rotates unique transaction codes that can’t be repeated. Instead of requiring a signature, the credit card will ask for a four-digit pin code to authenticate the transaction.

Merchants complain of the cost of upgrading to microchip readers. Naysayers that the counterfeit fraud it stops is not worth the trouble of conversion, warning that card-not-present online fraud will rise dramatically in its place.

Anyone arguing that magnetic strip cards that store personal information on the strip, making the card vulnerable to theft and fraud is the way to go in the 21st century should probably stick with cash payments, IOUs and wooden nickels.

If you’ve ever been victim to the chaos and indignation a lost or stolen magnetic strip credit card has caused, the claims that chip and pin microchip credit cards offer no additional protection are offensive.

I’ve been a victim of credit card fraud more than once. Unknowingly I dropped my credit card and in less than 24 hours, a man proceeded to use a woman’s Platinum American Express at establishments like Wal-Mart, Chuck-E-Cheese, Dollar Tree, gas stations and a local pizzeria. The pizzeria owner found it so suspicious, they took a phone camera image of the perpetrator. A man purchasing more than $250 in pizza with a woman’s credit card with a signature that did not match warranted a photograph, yet the pizzeria accepted the card anyways. And now they’re out $250. This would have all been improbable had a pin been required for the transactions.

If you’ve visited Europe, you will find that it’s common, even at restaurants, to pay with a microchip credit card where the server will hand you the device, you insert your card in the chip reader, approve the amount and enter your four-digit pin code for approval.

Statistics show that the microchip credit card technology works. Aite Group, an independent research and advisory firm focused on business, technology, and regulatory issues and their impact on the financial services industry has found that counterfeit credit card fraud has fallen 56 percent since microchip cards were issued in Britain in 2005. In Canada, fraud is down 49 percent. The remaining fraud happens across the border in countries without chip capability, like the US.

A microchip card is safer than magnetic strip because the chip creates a unique one-time transaction code. The transaction number is not usable again, preventing someone from duplicating the info. Fake microchip credit cards will be almost impossible, as well as unauthorized use of one without knowing the pin number.

As far as online fraud goes, its days are short-lived. Systems like Visa Token Service or Apple Pay work with the same microchip technology both in-store and online, by replacing the static credit card number with a temporary token that changes every time.

But for the technology to work, merchants need to be on board and stop being short-sighted. The cost of replacing standard swipe terminals with microchip readers is far less than the cost of losses from fraudulent credit card use. While chip readers aren’t mandatory yet, as of October 1, 2015, there is a “liability shift” where merchants and their processing companies will be liable for any counterfeit transactions.

Consumers could help push the industry towards safer technology in a couple of ways. By avoiding payment using older signature-based systems and selecting retailers in-store and online that use updated microchip cards or Apple Pay and Visa Token Service. As consumers demand security, merchants will follow, reducing fraud for all.





Really Bad Money Habits You’re Teaching Your Kids

Every parent wants to prepare their child for the real world. Whether you’re teaching them how to deal with conflict or how to be more independent, these lessons can stick with them throughout their lives. But although you do your best to train them, you might make a common mistake.

Some parents drop the ball when it comes to teaching their kids good money habits. This isn’t because they don’t care about their children’s financial future, but rather because they lack the proper understanding of money management.

You can’t teach what you don’t know. But since children usually imitate the behaviors of their parents, it’s important that you increase your knowledge, so you can then pass this knowledge to your kids. If not, they might grow up never fully understanding the right and wrong ways to manage their money.

So, what bad habits are you potentially teaching your kids?

1. Arguing solves money problems

When you have money problems with your spouse, how do you handle these issues? Do you yell, scream and blame each other for the financial mess? Or do you sit and talk calmly about these issues?

Even if your children aren’t visibly present during heated money discussions, they might hear you argue from another room or pick up on the tension. This sends a bad message and your children might grow up thinking this is the way to handle their money problems.

Understandably, tensions can run high when you’re cash-strapped. But if you make a practice of waiting until you calm down to discuss money issues, and if you resolve to never argue about money in front of the kids, they’ll learn an effective and healthy way to deal with money disputes.

2. You don’t have to save money

If you never save your money, your children may grow up and downplay the importance of building their cash reserve.

Saving money for a rainy day is imperative to your financial health. There are times when you won’t have enough cash for an expense. If you don’t have a savings account, you might have to rob Peter to pay Paul, or use a credit card and get into debt. However, you can avoid both of these scenarios by establishing a savings routine. And while you’re improving your savings habit, get your children into a routine of saving their money.

Whether they have a piggy bank or a bank account, make sure your children save a portion of their allowances or gift money.

3. You can buy now, and pay later

Most people don’t have cash to pay outright for a house or car, so they get a loan. But while some debt might be unavoidable, children shouldn’t grow up thinking credit cards are the secret to getting whatever they want, whenever they want it.

If you’re always whipping out a credit card and buying things you can’t afford, your kids may think this is acceptable and mimic your behavior. And unfortunately, this can result in your kids accumulating massive debt before they even graduate college.

This doesn’t mean you should never use a credit card. Just make sure you teach your children the right and wrong ways to manage credit. Stress the importance of only getting one or two credit cards and only charging what they can afford to pay off.

4. You have to keep up with others

Children are intuitive and smart. So they notice when you’re trying to keep up with the Joneses. Do you constantly talk about purchases made by other people? Do you buy what your friends have to keep up or remain a step ahead of them. Whether you want to realize it or not, your kids can pick up on this. And unfortunately, they might grow up and think they have to own what other’s have — no matter the cost.

This can give birth to their competitive side. And once they’re older, they might get into debt or sacrifice their savings account to buy the next biggest and baddest thing.

Millennial’s Financial Management Tactics Compared To Older Generation

Through a press release, the American Psychological Association stated that one common stress among all generations is financial concerns. They further revealed that while 85% of millennials cite money and job satiability as significant causes of stress, only 71% of the older generation views these factors as sources of stress. As a result, millennials seem to have different financial management factors compared to the older generation, as discussed below.

Technology and Online Platforms Are Important Sources Of Advice

In a report titled, Millennials and Wealth Management Trends and Challenges of the New Clientele, Deloitte stated that the past financial crisis and the volatility of the financial markets have made generation Y very cautions and conservative with regard to financial management. Compared to older generations, this generation ensures that it does adequate research before settling on any financial option.

Millennials heavily rely on technology for financial advice and subsequent decision making. As a matter of fact, the report showed that up to 57% of millennials would trade their bank relationship for better technological solutions- a trend that is not seen with older generations.


The Deloitte report also showed that generation Y makes fewer financial risks compared to older generations. While generation X have deeply invested in stocks, less than 30% of millennials have chosen a similar path.  They mostly prefer physical assets and cash, consequently demanding only clear, simple and straightforward financial solutions.

The older generation have been trusting the government and financial institutions with their retirement benefits, a trend that generation Y finds rather too risky. As a matter of fact, 51% of millennials do not trust the social security systems for their retirement needs and instead look for other tangible options that banks are rolling out. Notably though, they still believe in retirement savings and actually save at least 13 years earlier than baby boomers for their retirement.

They Don’t Make Financial Decisions Alone

The older generation completely trust their financial advisers and act without second thoughts. Millennials on the other hand, seek classical investment advice and greatly consult their peers and the media before implementing their advisers’ recommendations.  Actually, only 10% of them make financial decisions without the input of media and peers.

They Are Self-Directed In their Investments

Generation Y is self-directed, posing to be more of a challenge to deal with than older generations. Millennials assume that they understand the markets and are well conversant with different products and trends. Contrastingly, and rather interestingly, 84% seek investment advice, indicating that they are indeed they in need of world class advice even more than the older generation.

Marrying Late

A Pew Research Center’s study showed that only 26% of millennials are married. This is a lower rate compared to older generations (36% of generation X and 65% of the silent generation)  when they were at a similar age bracket as today’s millennials.

The study suggested that the late marriage trend was a way of millennials managing their finances, since higher education and better careers promise greater financial security in marriage. Therefore, they take longer periods in school securing their future. Millennials with lower levels of education and income strongly stated that they believed that they lacked an essential prerequisite for a strong marriage.

Due to these observable differences, the current investment trends are increasingly turning out to be different compared to the past. As a matter of fact, the entire world has been affected, with current economic forces shifting from the previously dominant factors.