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ATM and Overdraft Charges Are Hitting Record Highs (And Hitting Your Wallet)

How much money are you losing by visiting that ATM that’s not affiliated with your bank? What about when you accidentally overcharge by just a few cents? Turns out, it’s costing you more than ever, according to recent numbers.

It’s costing consumers more money to access their own personal finances than ever. A recent change was made to most ATM and overdraft fees that actually stem from two different charges made to consumers.

Consumers Are Actually Paying Two Fees Every Time They Use An Out-of-Network ATM

A recent study by found that the average fee consumers are paying at out-of-network ATMs when they withdraw their own money has hit a record high of $4.52 per transaction, in addition to the money drawn from their account.

The two charges come from two different sources: the ATM owner and your bank as a penalty for using another ATM source. According to Greg McBride, the chief financial analyst for, “Your bank, the majority of the time, is going to charge you. And almost without fail the ATM owner is (also) going to charge.”

Geographical Location Can Affect How Much You Pay At An ATM

Where you live may also have an effect on how much money you’re charge every time you visit an ATM, as well. The same study released the financial findings from twenty cities with the highest consumer transaction fees on average, and compared the ATM fees that the average consumer is charged when they make a withdrawl from a machine that’s not affiliated with their personal bank, shown here:

The highest consumer transaction fees were found in Atlanta, where you can expect to pay an average of $5.15 for every transaction you make. The least expensive bank transactions were surprisingly found in San Francisco, a city known for the high cost of living. There you can typically expect to pay around $3.85, according to the study.

ATM Fees Recently Increased by 21%

In just the past five years alone, fees charged to consumers for using out-of-network ATMs have jumped up by 21%, and have been steadily rising:

Columbia Business School Professor Patrick Bolton teaches banking and economics, and says that the dramatic increase in the average transaction fee could be due to a decrease in the number of people using ATMs, as more consumers are using their debit cards rather than cash.

According to Bolton, another factor could also be at play: “There seems to be less use of ATMs, and that would almost automatically give you a higher cost. The other potential related reason is that … sometimes those fees are waived for good clients by banks. And so, if those fees are waived for some clients, they have to be paid for more by others.”

People Are Finding Ways to Dodge Hefty ATM Surcharges

While there’s been a 41% decrease in ATM usage since 2005 due to a rise in popularity of debit cards, ATM surcharge fees are rising to compensate for that decreased usage. So consumers are finding new ways of avoiding the expensive fees altogether whenever they need cash on hand.

According to a survey of 3,000 adults taken last November by the major consulting company, Mercator Advisory Group, one-fourth of all the people surveyed will do almost anything to avoid the increasingly high surcharges enacted by ATM owners and their personal banks. The most popular method to get cash and avoid the massive fees? Cash-back options at grocery, convenience, and drugstores.

Consumers who are opting for cash-back whenever they make a purchase with their debit card at the checkout line can get petty cash and also avoid the rising ATM surcharge fees.

Overdraft Charges Are Also Getting Out of Hand for Consumers

The same Bankrate survey found that banks’ overdraft charges average at $33.07, which is up 9% since 2010. So even if a consumer overdraws on their account by a dollar or two, they could be facing an increasingly large fine that recurs every day that they don’t notice their account was overdrawn.

There’s a reason for this consumer-costly change, according to Bolton. Banks are looking for new ways to gain revenue. “They’re earning almost no money on deposits, but they’re paying fixed costs; branch costs, ATM costs, and somehow they have to recoup on those costs. If you can’t earn it on the interest spread, you earn it through fees,” says Bolton.

The easiest way for consumers to avoid high overdraft charges from their bank is to sign up for text and email alerts whenever their account reaches a certain low level. This way, they can avoid accidentally making any purchases that would overdraw their account and enact the heavy overdraft fees.

Published inSavvy Banking

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