When consumers in America go to an ATM that does not belong to the institute they bank with, most of the time they can expect to pay a fee. However, ATM fees across America has hit an all-time average high of $4.52 per transaction. That is the average amount that consumers are paying to get money from an ATM machine that is not in their bank’s network, according to a recent survey from Bankrate.
According to USA Today, the average amount in ATM fees is a combination of two fees, and not just one fee.
Greg McBride, Bankrate’s chief financial analyst, said that consumers’ banks are going to charge fees the majority of the time. Aside from the bank charging their fees, the owner of the ATM will likely charge their own fees too.
The survey points out that ATM withdrawal fees increased by 21 percent in the span of five years. According to NBC News, this is because banks are trying to make up for losing money in other areas of their business. Raising ATM fees is one way to make up those losses.
McBride did say that consumers should know that ATM fees can be avoided. He said that people should use a bank or credit union that fits their lifestyle. If they do this, then they will be able to keep more of their cash instead of losing it when they have to pay ATM fees.
Another reason why ATM fees have increased is because consumers are not using ATM machines as often as they once did. In fact, over the last decade, debit card withdrawals have dropped down 41 percent.
According to the International Business Times, Atlanta, New York, Phoenix, Miami, and Milwaukee were the cities where ATM fees are the highest. In Atlanta and NYC, consumers can spend more than $5 to access their money via an ATM that does not belong to their bank’s network.
In 2014, banks in America pulled in around $34 billion in fees, but back in 2009, banks pulled in $41.7 billion. Prior to 2009, the amount banks earned from customer fees had risen yearly since 1942, which is when the Federal Deposit Insurance Corp. started to record it.
Online services may have also led to banks increasing the amount they charge for ATM withdrawals. Sites such as Square have processed a lot of money. In 2014, Square processed over $30 billion in payments. Apple Pay is another service processes payments, but Apple Pay offers mobile payment solutions. In 2014, 41 percent of consumers in America used their phones to pay for something at a merchant location. That is up from 18 percent the previous year.
The shift in the way consumers are behaving may be troubling for ATM owners. In the United States, there are 425,000 ATMs, and 52 percent of them are owned by independent businesses.
McBride said that the networks need to be maintained, and that means spending money to maintain them. He added that the burden has fallen on non-customers.
Many banks also have overdraft charges, which happens when consumers spend more money than what’s in their checking account. The national average overdraft fee was $33.07, which is a 9 percent rise from 2010, according to CNN. Those living in Phoenix pay an average of $34.35 in overdraft charges, while consumers in Denver pay an average of $34.50. In Baltimore, people pay an average of $34.55, and in Atlanta, they pay $34.57 in overdraft charges. Milwaukee is where consumers are hit with the highest overdraft charges, as they pay an average of $34.79.
Consumers are still being hit with overdraft charges, even though there is federal legislation in place that place some limits on overdraft charges.
McBride also said that free checking accounts could end up being a thing of the past. As of now, 37 percent of non-interest checking accounts are free, but that is a drop from 76 percent in 2009.