You won't believe average cost of using an ATM

You might want to think twice before whipping out your ATM card, because fees for out-of-network locations have hit a record average of $4.57, according to a new Bankrate.com survey.

The $4.57 total represents a combination of the average ATM-owner surcharge of $2.90 and an extra $1.67 charged by consumers’ banks for going outside the network. It's the 10th consecutive year that fees have reached new heights, surpassing last year's average of $4.52.

An unplanned stop at the ATM for $20 will cost nearly 23% in fees, said Greg McBride, Bankrate.com’s chief financial analyst. Rising ATM fees — the highest of which can be found in Phoenix, at an average $5.07 per transaction — hit low- and moderate-income households the hardest, he said, as the fees eat up a greater percentage of their money.

But consumers are wising up. As fees rise, the number of out-of-network transactions is falling, McBride reports. Consumers have learned to avoid ATMs with hefty fees and are switching to debit, credit or phone-linked accounts to make payments instead of using cash. In an odd twist, that shift is actually contributing to banks boosting their fees, he said, because the financial burden of maintaining and growing banks' ATM networks is falling on fewer shoulders.

Kyle Winkfield, managing partner of Washington, D.C.-based wealth management firm O’Dell, Winkfield, Roseman and Shipp, said the first ATM surcharges came in 1994 when Triton Systems brought independent ATMs to the market. Banks saw that consumers would pay for the convenience and soon adopted surcharges of their own.

“I think they’re charging because they can, and they’re getting away with it,” Winkfield said. “People love convenience, until the surcharge hits a number where people say, ‘Enough is enough.’”

Until then, financial self-discipline is the best way to avoid out-of-network surcharges, he said. Bank websites list the locations of in-network ATMs. Consumers should think ahead about the total amount of cash they’ll need and withdraw it all in a single transaction, avoiding fees for multiple trips to the ATM. In a pinch, Winkfield said, people can go to stores that offer cash back on transactions with debit cards.

It also can pay to shop for another bank or credit union that reimburses customers for their out-of-network surcharges, McBride said. High ATM fees are here to stay, but there are plenty of people who never pay them at all.

“Paying $5 (in surcharges) every once in a great while isn’t going to break you,” McBride said. "But being in the habit of withdrawing from out-of-network ATMs is a sloppy financial habit that will put you in the poorhouse."


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