ATM Fees Hit Record High

ATM fees have hit a record high as Americans continue to face inflation on everyday necessities like grocery, gas and housing.
The average combined ATM fees for an out-of-network withdrawal have reached a record high of $4.77, according to a new study from Bankrate. That marks an increase for a fourth consecutive year.
“If you make an out-of-network ATM withdrawal, expect to pay and pay more than ever before. Fees have increased again and you’ll typically pay two fees – one to the ATM owner and another to your own bank,” Bankrate Chief Financial Analyst Greg McBride said in the report.
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Average ATM surcharges were $3.19, another record high, and the costs can add up for Americans who need access to cash quickly.
However, the fees you pay at an ATM can vary dramatically based on location, Bankrate said.
Atlanta, San Diego and Phoenix had some of the highest ATM fees, ranging from $5.22 to $5.33. Meanwhile Boston, Seattle and Philadelphia saw some of the lowest, all under $4.50.
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“With 24/7 mobile account access, it is important to monitor your available account balance – not just the balance in the account but the amount available for immediate withdrawal – before initiating transactions,” McBride said. “This is the best way to avoid overdraft fees.”
Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, said the record high ATM fees are a result of rising costs in general on behalf of banks and ATM operators.
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“Like most other everyday services, the expenses of operating ATMs have risen over the past few years, and those costs are being passed on to the customer,” Beene told Newsweek. “Some of it, though, is simply because they can.”
Since more Americans are using credit and debit cards for the majority of their purchases, the pool of customers needing to withdraw money is getting smaller.
“Banks and ATM operators know they can charge higher fees to access that cash,” Beene said. “After all, if you’re out-of-market for your bank, and need cash above any other form of payment, you’re going to have to pay whatever the ATM operator charges.”
Kevin Thompson, a finance expert and the founder and CEO of 9i Capital Group, agreed, saying the declining use of ATMs has been met with rising costs to maintain profitability.
“The consolidation in the banking industry has been another culprit which reduces competition and the rise of third-party ATMs in many convenience stores and other outside locations,” Thompson told Newsweek.
The rising fees disproportionately impact lower-income consumers, he added.
“The reality, in the short term, ATM fees are unlikely to decrease because there is truly no incentive to do so,” Thompson said. “There will need to be some sort of regulation that forces prices down due to the rise of competition from digital wallets, and other free online sources.”