When you use your ATM card at an out-of-network bank, you usually have to pay. But what most people don’t realize is that there are actually multiple fees: fees your bank may charge, and a fee the ATM’s bank may charge.
The second fee, what banks charge out-of-network cardholders, has climbed for the past 14 straight years, rising around 36% in the last decade, according to a study by Bankrate.
Overall, the total cost of an ATM withdrawal out-of-network is $4.68, just a penny off the all-time high, which was last year.
Total ATM fees have risen 52% over the past decade, most of which has come from those charged by the ATM’s bank. According to Greg McBride, the chief financial analyst for Bankrate, there really isn’t much downside for banks to take this approach, which has helped them squeeze more revenue through fees.
“[This] has always been low-hanging fruit in terms of boosting fee income, because nobody is worried about alienating a non-customer,” McBride says.
While this has increased revenue for banks per person, the use of cash has dropped, and with it ATM withdrawals, which has led to some changes.
“As people use less cash, they get smarter about how they access their cash, and make fewer out-of-network withdrawals,” McBride said. “This fee is likely to rise further as the cost of maintaining the ATM network is spread over fewer transactions.”
When someone is on the street looking for cash, ATMs have a leverage over consumers as they provide a service with high demand and potentially little supply — unless a customer has the time and willingness to comparison shop ATM fees, which aren’t advertised until just before the transaction is to be completed.
ATM fees aren’t the same everywhere, and don’t just vary from bank to bank, but rather metro area to metro area. According to Bankrate, the worst city is Detroit, which has an average of $5.28, followed by Atlanta, Houston, and Denver — all over $5 for using out-of-network ATMs. On the other hand, taking cash out in Miami from another bank costs only $4.37.
The average out-of-network ATM surcharge broke the $3 mark for the first time this year — it’s $3.02 nationwide. But there is some good news: the out-of-network ATM fees that banks charge their own cardholders have fallen. Additionally, almost a third of banks now offer free out-of-network withdrawals, meaning that those customers can essentially go to any ATM for free. This is a record high.