Good News, Bad News on ATM Fees

Nuisance fees — banks love them; customers hate them. Fees of all kinds, including ATM fees, overdraft fees, and late charges account for more than half of all bank revenues. Customers who get whacked with an overdraft fee may get irate, but for everyday annoyance, ATM fees take the top slot. Use another bank’s ATM and you’ll get slapped with a fee from that bank and probably another fee on top of that from your own bank. For banks, though, ATMs have become $2-3 billion-a-year cash cows.

An annual increase in ATM fees has become routine and this year is no different. According to a survey by Bankrate.com, using an ATM from a bank that’s not your own cost an average of $2.22 in 2009, up 12.6% over last year. The average ATM surcharge has more than doubled since 1998, when it was less than a dollar. There’s little chance of avoiding these fees, either, since 99% of banks impose them. There’s better news on the other side of the transaction, however, since the average charge by home banks dropped to $1.32 from $1.46. Many banks have lowered or even waived these fees, which accounts for the decrease.

There are some ways to get around ATM fees. One is to open an account with a small community bank or a credit union that will reimburse you for a certain number of ATM charges per month. If you’re on the road, travelers checks make a safe and cheap way to carry cash. If you have a debit card, you can make small purchases at retail stores and get $20 in cash each time you buy.