If you use an ATM in metro Atlanta that is not included in your own network, it will really cost you.
Atlanta has the nation's second-highest out-of-network ATM fees, averaging $5.50 per transaction, according to the annual survey of the 25 largest U.S. metros by Bankrate.com, a personal finance site for consumers.
Nationally, the average out-of-network ATM fee is at a record high of $4.72, up 33% over the last decade, the survey found. Houston was the most expensive, averaging $5.58. Los Angeles was the lowest, $4.15.
Typically, consumers pay no fee to access funds through an ATM run by their banks or through an alliance in which their banks participate. But often when consumers want cash, the ATMs of their own banks are nowhere to be seen. So they use an “out-of-network” ATM – and get dinged.
“It’s just convenience,” said Greg McBride, Bankrate’s chief financial analyst.
Fees have been rising partly because of changes in customer habits: People in general use ATMs less frequently, which means that banks have income from fewer transactions to pay for the networks. And if consumers can find their own network, they are not paying that out-of-network fee.
So to make up the difference, banks charge more for each out-of-network transaction.
Moreover, low interest rates mean banks are making much less profit on the money they lend, so they need to make more profit on the non-interest parts of the business.
More likely than not, those ATM charges will keep going up, McBride said. “These are fees charged to non-customers and nobody is really worried about alienating non-customers.”
A consumer’s daily need for cash seems to have dropped, thanks to a proliferation of credit and debit cards, as well as the rising use of smartphone applications. Consumers can buy their coffee, their lunch, their clothes and their groceries without ever touching money. Some retailers have considered banning cash altogether.
But an entirely cashless world is far off, said David Tente, executive director, ATM Industry Association in the Americas, which represents a range of financial, manufacturing, equipment and service companies. The association has been lobbying legislatures to prevent retailers from banning cash, after five states states did just that, he said.
So why are Atlanta’s out-of-network ATM fees higher than most other big cities?
It’s a mystery. The American Bankers Association couldn’t provide an explanation. The Georgia Bankers Association also didn’t have an answer.
But McBride, at Bankrate, says his company has been doing the survey for two decades and Atlanta is often among the most expensive. In Atlanta, he added, “none of the big players have a fee that is below average.”
Roughly $700 billion a year is withdrawn from ATMs – an average of about $120 per transaction, according to a Federal Reserve study.
ATMs became harder to find after many bank branches closed in the wake of the financial crisis. But the number of ATMs has stabilized in the past few years, at a little more than 475,000, according to the ATM Industry Association’s Tente.
He said Americans are visiting ATMs less, but when they do, they withdraw more money. Add it up, he said, and the overall dollar amounts have not dropped much.
Highest average ATM fee by metro area
Houston: $5.58
Atlanta: $5.50
Detroit: $5.27
Chicago: $5.14
Philadelphia: $5.11
Source: Bankrate.com
Highest average overdraft fee by metro area
Philadelphia: $35.50
Baltimore: $35.05
Houston: $34.61
Atlanta: $34.60
Phoenix: $34.30
Source: Bankrate.com
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