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Withdrawing money an ATM not owned by your bank has never been cheap. But now, ATM providers have new way to make sure they maximize the fees you pay for withdrawals.
From Felix Salmon of Reuters:
Paul Volcker likes to say that the only worthwhile financial innovation of the past 20 years has been the ATM. So I suppose it was only a matter of time before that, too, was rendered evil.
Here, courtesy of Peter Eavis, is how the ATM at the Holiday Inn in Orlando now works -- it doesn't just charge $3 per withdrawal, but rather the higher of $3 or 3%.
ATM fees have been climbing steadily ever since Bankrate first surveyed them in 1998, when the average out-of-network withdrawal would cost you 89 cents. The rate of increase has been, at least in recent years, about in line with inflation.
But if it gains widespread traction, this method of figuring ATM fees will amount to a gigantic fee increase for anyone withdrawing more than about $100. For many ATMs, a common cash withdrawal limit is $400; to make that withdrawal under the above terms would cost you $12. And that's not including whatever your own bank charges you for an out-of-network withdrawal.
What do you think? Is charging a percentage of large withdrawals reasonable? Would it discourage you from taking cash out?
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Xavier
March 16, 2012 at 8:35 pm
ATM Machines are not free. The machines can cost thousands of dollars. On top of that there can be network fees that allow my bank to talk to another,armored car(truck) delivery cost,insurance cost for property and liability, installation cost, the cost of money (interest) paid for the cash in those machines, administrative cost necessary to meet required reporting etc. The list goes on.... You can walk away from the ATM just like a soda (pop) or any other vending machine. Just saying there are cost involved for dispensing cash where and when you need it.
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Interesting , that is not what the banks said 30 years ago when they started rolling ATM's, it was more of this won't cost anything because the savings we get by not hiring more employee's will make up for it. Also if that wasn't the case why did they NOT charge 30 years ago?
Kinda like the phone companies and operators. I remember as a kid I could call information and hear the operator turn the page of the phone book as they looked up the number I was looking for. 20 years later it was a buck to get a number from information and they by then had computers to look it up but people didn't have access to one.
ATM Machines are not free. The machines can cost thousands of dollars. On top of that there can be network fees that allow my bank to talk to another,armored car(truck) delivery cost,insurance cost for property and liability, installation cost, the cost of money (interest) paid for the cash in those machines, administrative cost necessary to meet required reporting etc. The list goes on.... You can walk away from the ATM just like a soda (pop) or any other vending machine. Just saying there are cost involved for dispensing cash where and when you need it.
I've never used an ATM and never will. Anyone who can't keep a little cash available at all times and have some ready for an emergency doesn't have a clue about managing money and/or his/her life.
If people are stupid enough to pay $12 in ATM fees then they deserve to be ripped off. As others have said anything over $3 for a out of network transaction is unreasonable in my opinion so I will NEVER pay it, I will just switch to cash and use my credit card as much as I can. ONLY because stupid people shrug their shoulders and pay these kinds of obscene fees is why the banks can continue doing it.
Just carry cash and be done with it. We survived for centuries without ATM's. If you are really a wussy, get traveler's checks. Most banks will still let you have them at no charge.
There are other ways to get cash. Most grocery stores allow their customers to get cash back on debit card purchases for free. Bank ATM's aren't charging their own customers for withdrawals yet, and there are also credit unions with few ATM locations of their own that will compensate their customers by reimbursing fees for using another financial institution's ATM.
Don't throw your hard earned money away on these outrageous and unnecessary fees.
I already avoid using ATM's when possible as the fee's are already bordering on to high. Calculating and taking the higher of two amounts, flat or percentage, would just further that. I understand that the ATM's owner have to have something to make it worth their wild, but a long time ago it just became greed.
OUW, That hurts. There goes this convenience. Money hungry banks. What is good ole honest Abe gonna do now?
I will NOT use ATM again as long as there is a fee for using it whatsoever. I will ask my family, relatives, friends, co-workers, organizations and my communities in my state and other states do the same.