THE average out-of-network ATM fee is now about the cost of a six-inch Subway sandwich or grande mocha cappuccino at Starbucks.
In the last five years, the cost of withdrawing cash a local ATM has jumped 21 percent to a record $4.52 per transaction, according to a survey from data provider Bankrate Inc.
Atlanta and New York top the list of cities with the highest average ATM fees, at $5.15 and $5.03, respectively, per transaction.
The spike comes in part because of more stringent regulations that came after the financial crisis, as well as pressure from consumer advocates to reduce certain fees, including overdraft and credit card charges, the Wall Street Journal reported.
Along with higher fees, however, has come a drop in the number of people obtaining money from ATMs, according to a survey by consulting firm Oliver Wyman. Individuals pulling cash from these machines has dropped 41 percent in the last 10 years. Furthermore, the survey found that in the last decade, individuals have decreased their monthly ATM withdrawals from 3.4 times per month to two.
As a result of the reduced frequency of use, ATM owners and banks have had to raise fees to cover their costs.
“Someone has to pay to maintain these ATM networks, and so that burden is falling on the noncustomers,” said Greg McBride, senior financial analyst at Bankrate, according to the Journal.
Consumers have turned to other methods of obtaining cash for free, including going to their own banks, and opting for cash back when making purchases at supermarkets or drugstores.
In a consumer survey conducted by consulting firm Mercator Advisory Group, nearly 75 percent of 3,000 participants said they would take whatever measures they can to avert ATM surcharges.
“I can see no reason to pay a fee unless there’s some emergency,” retired computer programmer and Wells Fargo customer Steve Cohen told the Journal.
In the same survey, 29 percent of participants said they have never paid an ATM fee, and 26 percent indicated they were willing to pay a fee to use an ATM in a convenient location.
Alongside higher ATM surcharges, overdraft fees have also been on the rise. Since 2010, the average fee has spiked 9 percent to a record $33.07. Residents of Milwaukee, Wisconsin and Atlanta, Georgia are subject to the highest charges, at $34.79 and $34.57, respectively.
“A lot of those consumers with routine overdrafts rely on it, it’s a form of credit for them,” McBride said, according to Q13 FOX. “It’s easier for them to pay a $33 overdraft fee [than] to have their mortgage payment not clear.”
Cities averaging the lowest in ATM surcharges are Cincinnati ($3.86) and San Francisco ($3.85).
