Automated Teller Machine fees really get my goat!
Of what banks charge though, for the record, they charge way too much. Of all the fees we can avoid, it’s this one. We can do so by picking banks more judiciously. We can read the fine print of our ATM card agreements. (According to one recent survey, many of us aren’t even reading ATM signs correctly. Twenty percent of us think that we aren’t subject to ATM fees as long as the automated teller machine we use bears the same financial network logos such as “Star,” “Cirrus,” or “Plus” shown on our bank cards.) Or we can just drive a few extra blocks to get to our own banks, where chances are we won’t be hit with as many ATM fees.
The funny thing is, many of us routinely drive several miles out of our way to buy cheaper gas, but won’t do the same for cheaper money. While some critics of bank fees harp on the very existence of ATM charges, I don’t. Listen, if you withdraw money from an ATM that doesn’t belong to your bank, you’re getting a service. And you’re getting that service from a bank that you don’t do business with. Why shouldn’t you have to pay for it? My only complaint is how much they charge and whether they make it clear that they’re charging that much.
Think about the number of times you withdraw money from an ATM. It could be as often as once a week, which translates into four times a month or 52 times a year. Now think about what banks routinely charge today. Nine out of 10 banks charge non-customers who use their ATMs, and the typical “surcharge” is about $1.50 per transaction. A growing number 13 percent in 2002 are charging $2.00 or more. That’s $2.00 for the right to access your money through another bank’s ATM. But there’s more. In addition to the surcharge that the other bank will hit you with, you’ll likely be slapped with a second fee, this time by your bank for two-timing it. This is sometimes referred to as a “foreign ATM fee,” which is simply a penalty for going outside your bank’s network of automated tellers.
These days, 9 out of 10 banks levy such foreign ATM fees on customers who use other banks’ machines, and that fee typically amounts to another $1.50 to $2.00 per transaction. So, assuming you’re one of those folks who doesn’t comparison shop, you’re looking at $4.00 per transaction in a worst case scenario, which works out roughly to about $208 a year. If you were to invest that amount every year for 25 years, you could amass $16,500, assuming an 8 percent average annual rate of return.
Remember too that a minority of banks also charge their own customers a fee even if they use an in-network ATM. And still others about 9 percent charge customers an annual fee for the right to have an ATM card in the first place. It’s no wonder, then, that banks collect more than $2 billion a year in ATM fees each year. That’s up more than 40 percent from 1998.