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twice about visiting a random yet convenient ATM outside of their banking network, especially when the amount to be withdrawn might only be $20.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.