Thu, Dec 29, 2016
According to Bankrate.com, ATM fees hit new record highs for the tenth year in a row. With the average fee for using a non-network ATM at $4.57, how have out-of-network fees grown so high?
“Banks and credit unions are looking for sources of non-interest income,” says Terry Pierce, Senior Product Manager at CO-OP. “Interest rates have been at historic lows for years now, so credit unions are looking for ways to offset their costs.”
That said, it probably isn’t credit unions driving fees toward the $5 level – and beyond. “Credit unions tend to be lower from a surcharge perspective. Their fees might be in the $2 to $3 range,” Pierce says. “Where you see higher fees, it’s usually at a location where people are paying for convenience – a stadium, a casino, a convenience store. In those cases, consumers may not feel like they have much choice, so they’ll pay a higher fee.”
Record-high ATM fees may not apply to credit unions directly, but they probably do have an impact on member loyalty. A $4.57 fee is more than 20 percent of a $20 withdrawal. That’s enough to inspire most consumers to seek out an in-network ATM whenever possible. “A Mercator study found that most consumers – maybe as many as 90 percent – use their own bank or credit union’s ATMs,” Pierce says. “Consumers will avoid surcharges when they can, though a smaller percentage will pay a fee if they really want the convenience.”
If this is true, it may be more important than ever to have an ATM network that is extensive and visible. As fees continue to rise, people are looking for surcharge-free ATMs to cover their basic self-service banking needs. Having 30,000 ATMs in 50 states has never been handier.
Source: CO-Op Financial Services