ATMs: rising cost of convenience

Transaction fees for using other banks average $2.86 NBC's Kelly O'Donnell on the yearly fee more banks are charging for using ATMs.

By Kelly O'Donnell NBC NEWS CORRESPONDENT

NEW YORK, April 3 — Automatic teller machines have become a large part of modern banking because they’re convenient and available at all hours. But the banking industry has been steadily raising the ticket prices for money that belongs to its customers.

There’s now a new charge for convenience.

It’s a different kind of ATM fee that may now be tacked on to your bank statement — a yearly fee that consumer advocates call another fleecing of America. “Now consumers should expect to pay an annual ATM card rental fee just to have an ATM card,” says Ed Mierzwinski of the U.S. Public Interest Research Group. A new report tracked nearly 400 banks and credit unions and discovered what they say is a new trend — almost one in four big banks surveyed charge a so-called “rental fee.”

At the high end, that amounts to $18 a year. The average is an extra $14 annually for ATM privileges. That’s before you pay the transaction fees and surcharges when you actually get cash.

And those fees are up too, nearly tripling in five years. When you withdraw cash from a bank other than your own, you pay for the transaction twice. Your bank charges a fee and so does the one you used. That cost had been about a dollar, but now runs an average $2.86. Still another way you pay is when you make a deposit using a different bank’s ATM. That charge can be up to $2.30. CASH COWS “ATM machines are cash cows for the banks,” Mierzwinski says, “and they’re making money hand over fist.”

The U.S. Public Interest Research Group estimates banks take in $2 billion a year on ATMs. However the American Bankers Association calls that figure too high — but would not give its own number and claims most consumers pay very little to use ATMs.

“The reality is that the majority of Americans don’t pay those fees,” says Catherine Pulley. “sixty-eight percent pay $3 or less a month for access to their money.”

How can you escape higher fees? Iowa has the nation’s only ban on ATM surcharges. A dozen cities around the country are trying to get similar restrictions passed. Consumer groups say credit unions charge the lowest fees while some small banks are forming alliances to keep their fees down.

In Atlanta, there’s a no-fee zone. Not only does one small, Buckhead community bank not charge ATM fees, but even better, they reimburse their own customers when charged by other banks. “It’s been very positive for us in attracting new customers,” says Marvin Cosgray of the Buckhead Community Bank.

But many ATM users now pay more for access to their money — a few dollars a visit that some label a fleecing of America.

-- Anonymous, April 04, 2001

Answers

when dan hits the atm, it's a 2.00 teansaction fee, then also our bank charges ANOTHER 2.00 processing fee... so out of say 10.00....you pay 4.00 this is horrible! Dan thinks this is why people will be willing to go to a cashless society...they will make it sound so much better.......

-- Anonymous, April 05, 2001

When ATMs first came out, New Orleans was going through its "Murder Capital USA" stage. A couple of kidnap-murders took place at the new ATMs and I decided there and then I wasn't gonna use the damn things.

By the time we moved to a safer place, charges had been put on transactions and that got me PO'd. I reasoned if I had to pay per transaction, it ought to be in that nicely-decorated bank with the human tellers, good air conditioning and lush plants. THAT's where the overhead is, not at the cash machines! We've managed without them ever since.

-- Anonymous, April 05, 2001

I've never used an ATM; don't know if I'd even know how without a lot of on-the-spot instruction.

I've yet to see the movie, "Titanic", either. Guess I'm an anomaly, eh?

-- Anonymous, April 05, 2001

You too? I've never watched Seinfeld or that Allie Macwhatsit.

-- Anonymous, April 05, 2001