Bank customers are paying more than ever to use out-of-network ATMs with fees jumping more than 50 percent in the past decade, the Financial Times reported, citing a report by personal finance website Bankrate.com.
Banks are have turned to nuisance fees in an effort to bolster their revenue as record-low interest rates since the financial crisis in 2008 have squeezed margins. They also have faced stricter regulation and requirements to hold onto higher levels of liquid capital.
The average total fee for making a cash withdrawal from an out-of-network machine is now a record $4.69, compared with $3.03 in 2007, Bankrate.com found. The fee includes the surcharge imposed by the ATM owner on a non-customer and an additional fee charged by the account-holder’s bank.
But these fees are completely avoidable with more cautious habits, Greg McBride, chief financial analyst at Bankrate.com, told the FT.
“Incurring five dollars in fees to withdraw 50 bucks, if it happens once or twice, is not going to put you in the poorhouse; what is going to put you in the poorhouse is sloppy habits, seeing a constant drain of avoidable fees,” he said.
The Consumer Financial Protection Bureau changed surcharge rules in 2013 to compel banks to display fee information before a consumer commits to the transaction. That hasn’t slowed the onslaught of charges. The portion of ATMs that impose penalty fees on non-customers grew from 68 percent in 1998 to 100 percent by 2014.
“You’ve seen this slow creep in fees,” Nathan Stovall, a senior research analyst at S&P Global Market Intelligence, told the FT. “A 50 percent increase in fees overnight would probably hurt, but it just goes to show that people are willing to pay for convenience.”
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