WSJ: ATM Fees Keep Moving Higher

[question everything]

ATM Fees Keep Moving Higher

Banks Increase Charges To Capture Revenue Lost As Credit-Card Use Rises

By JANE J. KIM
Staff Reporter of THE WALL STREET JOURNAL
June 23, 2005; Page D2

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This spring, the average fee a bank charges a customer for using another bank's ATM hit a record $1.35, up from $1.29 last fall, according to Bankrate.com's Checking Account Pricing Study. Meanwhile, the average costs that ATM owners are charging noncustomers who use their machines -- also known as "surcharges" or "foreign ATM fees" -- rose to $1.40 from $1.37.

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One reason ATM fees are increasing is that more customers are using credit and debit cards more than cash, says Tony Hayes, managing director at Dove Consulting Group Inc. That means fewer trips to the ATM and less fee revenue for banks. So banks are making up for that loss of revenue.

The higher ATM fees are coming at a time when more banks are turning to fee income -- which can include ATM fees, bounced-check fees, and other charges that customers may be hit with if they fail to maintain minimum balances in their checking accounts. Fee income is a steady revenue source that isn't tied to fluctuations in the interest rates, says Brian Shullaw, a senior industry analyst at SNL Financial, a Charlottesville, Va., research firm.

Banks also are relying on fee income because their profit margin -- the so-called spread that they can earn between the rate at which they borrow and the yield at which they invest -- is continuing to narrow because short-term rates are rising faster than long-term rates.

The most common fee for using an ATM is $1.50, but a growing number of banks are charging $2... There are a few big banks that have taken the opposite tack with ATM fees in an effort to lure customers and retain old ones. Last year, Citigroup Inc.'s Citibank customers gained free access to ATMs in the nationwide MoneyPass ATM network, operated by Genpass Inc. Bank of New York Co. rolled out a checking account that waives its fees for customers using a competitor's ATM.

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Write to Jane J. Kim at [e-mail]

URL for this article:
http://online.wsj.com/article/0,,SB111948478481267067,00.html

[Nite Owl]

1. I was at an art/craft show a

few weeks ago and forgot my check book so I went to the ATM to get some cash. It came up as $3.50!!! My bank credits the fee for another ATM if you send in the receipt so I took the money out and the damned machine was out of paper. Was I ever pissed.

[cynatnite]

2. Effing bushtards! (bad language ahead)

You'd think someone who says he cares about the people so much would put come kind of cap on credit card companies and their outrageous interest rate and on the damn ATM machines as well.

It's highway fucking robbery! They're fucking us without even the pleasure of a reach-around!

Now, I'm feeling like Joe Pesci right now. A friend and I were out shopping a while back and I got a $2 charge for using one that's not with my bank. My bank will charge me a $1 for using another ATM that's not theirs.

They fuck you at the drive thru...they fuck you with the cell phones...they fuck you...! :rant:

[w13rd0]

3. Of course...

...if you keep a very high balance, the bank waives all fees. Therefore, like Bush, they make sure that those who can't afford to pay the nickle and dime fees...do...and those that can...don't...

Wow, ain't capitalism grand?