If you recently thought that it has gotten more expensive to access your money as of late then you’re right.
According to a new study released Monday by Bankrate.com, a customer will pay five percent more this year to simply access their funds on an ATM that is not owned and operated by their respective financial institution.
The survey discovered that a customer will fork over on average $4.35 for every transaction.
Study authors present the case that banking customers are getting smarter about how to access their funds by just avoiding ATMs altogether. However, financial institutions are also getting more astute by raising ATM fees to make up for lost revenues – in the past five years, ATMs fees have soared 23 percent.
The highest average ATM fees were situated in Phoenix ($4.96), Denver ($4.75), San Diego ($4.70), Houston ($4.67) and Milwaukee ($4.66). The lowest average ATM fees were traced to Cincinnati ($3.75), San Francisco ($3.93), Pittsburgh ($4.03), St. Louis ($4.12) and Los Angeles ($4.13).
Furthermore, overdraft fees have gone up for the sixteenth consecutive year. The average customer will experience a $32.74 charge each time they attempt to withdraw more money than they actually maintain in their checking account.
The highest average overdraft fees were located in Philadelphia ($34.80), Milwaukee ($34.47), Phoenix ($34.45), Boston ($34.37) and Denver ($34.20). The lowest average overdraft fees were stationed in San Francisco ($26.74), Los Angeles ($29.47), San Diego ($30.22), Cincinnati ($30.44) and Dallas ($31.33)
The conclusion that Bankrate.com officials made is that fees will continue to soar.
“Punitive-type fees, such as ATM fees and overdraft fees, have shown the most consistent increases over time,” said Greg McBride, CFA, Bankrate.com’s chief financial analyst, in a statement. “While this trend is unlikely to reverse, consumers should recognize that ATM fees and overdraft fees can be avoided completely.”
In addition, the survey also found that 38 percent of non-interest checking accounts are entirely free, which is little changed from 39 percent two years ago. If customers can meet various criteria, such as minimum balance, bill payment activity and direct deposit, then 95 percent of non-interest checking accounts are either free or can turn into a free account.
Overdrafts are big business
We reported in August of a Consumer Finance Protection Bureau (CFPB) study that highlighted how more than one-third of Americans have an overdraft account and the average overdraft and non-sufficient fund fees cost customers approximately $225 per year. In fact, according to the CFPB, paying overdraft fees can actually cost more than the price of the purchase.
“The average bank overdraft fee at a large, traditional bank is $35, and extended overdraft fees make the cost per incident even higher, so consumers are paying hundreds of dollars in unnecessary overdraft fees,” said Nick Clements, co-founder of MagnifyMoney, in a statement. “In fact, Americans spend over $30 billion a year on overdraft fees. New alternatives exist that could cut those fees by over 70%, putting more than $20 billion back into American pockets.”
Previous banking studies have reported that overdraft fees are a $30 billion business for financial institutions. In recent years, banks have been relying more on fees for their revenues because of low interest rates and immense regulatory burdens.
