$3 ATM Fees? Banks Increase the Price of Your Money
Struggling financial instutions looking for more ways to raise profits.
Jan. 27, 2008 — -- Consumers who rely on ATMs for quick cash access may find that getting their money actually costs them more as banks raise their ATM fees. The financial institutions, which already generate $10 billion a year in revenue from what they charge people for accessing their accounts from other banks' ATMs, have increased the fees in response to a poorer economy.
One expert said banks are relying on consumers to get them through the weak economic time.
"They're looking for ways to make up for the losses and nickel and diming appears to be the only way they can do it," Consumer Affairs analyst Joseph Enoch said.
Today, the average ATM fee is $1.78, while five years ago it cost a little more than a $1 to retrieve money from a bank with which you didn't have an account.
In some areas, JP Morgan Chase, Bank of America and Wachovia fees have hit $3 for non-customers.
Chase released a statement saying it, "created a network of 9,100 ATMs for the convenience and free use by our customers. It is appropriate to charge non-customers a fee."
It's not just people banking outside their network who have seen an increase in prices. Some banks now charge their own customers a fee for the convenience of using an ATM to the disdain of some.
"I don't think it's fair — that in order to hopefully fix things — that it's one and a half times what you used to spend at the ATM," one man said.
The fees also have helped banks cope with the housing slump and growing number of bad loans, which may never be paid off.
"As long as the market keeps tanking and the foreclosures become a larger problem, which it is going to in the next year, then they're going to have to make money somehow and this is probably their only route," Enoch said.
Some banks insist there's no link between the economy and the hikes. They say the increase is an attempt to offset the big cost of convenience. A decade ago there were 140,000 ATMs, while today there are 400,000 nationwide.
Analysts believe ATM fees will continue rising and insufficient fund penalties along with late credit card payments will be the next targets for banks.