According to a recent report, the average American pays about $4.52 per transaction whenever he or she wants to withdraw money from an ATM that doesn’t belong to their bank’s network.
Analysts from Bankrate.com found that the hefty fee is actually a two fees in one, which many consumers aren’t even aware of. Greg McBride, chief investigator at Bankrate.com, a Florida-based consumer financial services company, explained that the bank charges the customer and so does the ATM.
In Atlanta, if you want to withdraw money from out-of-network ATMs, expect to pay $5.15 per transaction, while in San Francisco that fee goes down to $3.85, according to the recent analysis.
Researchers also found that fees for out-of-network ATM transactions jumped 21 percent since 2010. Patrick Bolton, a banking expert at Columbia Business School, believes that ATM fees skyrocketed because fewer Americans rely on the machines to withdraw cash, so banks need extra money to maintain their network.
“There seems to be less use of ATMs, and that would almost automatically give you a higher cost,”
Moreover, banks allow their loyal customers to perform transactions at no cost. So, those fees need to be paid by other customers.
According to a report issued by PULSE earlier this year, ATM transactions dropped by 41 percent since 2005. PULSE, which is the owner of the third-largest ATM network in the U.S., involved in the study 70 financial services providers.
PULSE’s analysis also showed that a debit card is used on average twice a month, while a decade ago there were 3.4 ATM transactions per card every month. PULSE’s investigators believe that the decline in transactions may be tied to an increased use of debit cards in small transactions.
Ten years ago, it was highly unusual for a debit card owner to use a debit card in transactions that cost less than $5 to $10. Nowadays, it is pretty common for Americans to use debit cards to buy a cup of coffee. As a result, people do not rely as much on cash as they did a decade ago.
Researchers also found that more than a half of debit card transactions are less than $20. Moreover, ATMs are less popular because people can get their cash in cash back transactions at their local stores. And cash back is also a means of dodging ATMs fees when making small purchases such as paying for a lunch or a cab ride.
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