Between the rise of e-commerce, credit/debit card use, and mobile payment platforms, the days of “running to the ATM” for enough cash to get through the day are gone for many people. That’s one of the reasons why, according to a new survey of banks, out-of-network ATM fees and overdraft charges are hitting new highs.
Less cash, more fees
The good news for consumers from Bankrate’s report is that it’s becoming more expensive to access ATMs from other banks in part because it’s easier to avoid using them. You can quickly look up the location of an ATM from your own bank, or find one that’s part of the same network and fee-free from your bank’s mobile app.
Maybe you don’t need cash at all, though. Out-of-network ATM fees are increasing because fewer people are using the machines, and fewer people are using cash in general, favoring credit and debit cards.
“With fewer people making out-of-network ATM withdrawals, the cost of maintaining that network is being spread over fewer transactions,” Bankrate’s chief financial analyst explained to Bloomberg News.
There are two parts to an out-of-network ATM fee. The surcharge, the fee from the bank that owns the machine you used, reached an average of $2.97 this year. The fee that banks charge their own customers for using an outside ATM reached an average of $1.72. That makes the average total fee an average of $4.69.
While there will be a fee and and a required purchase, you may be better off using your debit card to get cash back at a store. Paying extra fees to banks doesn’t get you a pack of gum or a Hot Wheels car, does it?
Overdraft fees climbing, too
It’s not just ATM fees that are climbing, though. Overdraft fees also increased across the country. There’s no technological explanation for why they keep going up: Banks depend on fees to make money, and overdrafts are a reliable source of income because everyone believes that they’ll never overdraft again. The average overdraft fee across the banks that Bankrate studied rose to $33.38 this year.
You can avoid these fees by setting up your checking account so that overdrafts come from a line of credit or a savings account instead of incurring big fees every time you go over, or by setting up email or text message alerts when your account balance dips below a certain amount.
“Knowing where you can make free ATM withdrawals and monitoring your available balance to avoid overdrafts are as close as your smartphone,” Bankrate’s chief financial analyst, Greg McBride, points out. Both of these are usually options in your bank’s mobile app.
You also have the option to simply turn off overdraft protection for your account, which means that debit card transactions (not checks) will be declined when there isn’t enough money in your account.
Find the right bank for you
What ATM fees and overdraft fees have in common is that banks will often waive both, especially if it’s the first time you’ve incurred them and you call up and ask nicely. If you’re incurring fees often, set your accounts up differently, set up balance alerts, or look for a bank that has different policies.