ATM and overdraft fees are higher than ever
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The cost of using an ATM is higher than ever, with the average ATM fee rising to $4.52 this year, according to a new Bankrate study. Last year, the average fee was $4.35.That number represents both a growing fee from ATM owners, who, on average, charge users $2.88 per transaction, and from banks, who charge out-of-network fees of $1.64. Greg McBride, a Senior Vice President at Bankrate, told Buzzfeed News that "the owner surcharge is the one that tends to be up more consistently." The owner’s fee has increased 24% over the last five years.
Some of the most expensive ATM fees are in big metropolitan areas like New York City and Atlanta, which have average fees of $5.03 and $5.15, respectively.Overdraft fees, which at one point brought in almost $40 billion in revenue for banks, are hitting also new highs in response to federal policy changes. In 2010, the Federal Reserve made it illegal for banks to automatically charge customers overdraft fees on debit-card and ATM transactions. At that point, revenue from overdraft fees fell sharply. But in response, overdraft fees have risen after years of staying level.Why have overdraft fees steadily risen over the last five years? Because less and less people can be charged overdraft fees, banks have had to increase those fees in an attempt to keep revenues high, or at least stable.
Luckily for consumers, there are a lot of banking startups that want to offer free, online checking accounts with limited or no fees. Currently, I use Ally, which, in addition to the free checking account, actually refunds any ATM fees charged to my debit card (up to $10). Simple Bank, a startup recently acquired by BBVA, also offers a free online checking account. If you’re not willing to make the jump to online only, check out free checking account options from your local branches of big banks like Chase and Citibank or your local banks and credit unions. Many offer to waive the checking account fee as long as you hold either a minimum balance or set up a direct deposit.Image: clement127
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