By Kelli B. Grant
Executives at Chase (JPM) must be reading The Onion.
“$2 fee if Chase Rewards debit card is placed next to a debit card from a competing bank.” The Onion’s recent jab at fees seems a little less funny (and more prescient) this week, with the bank’s reveal that it’s considering jacking up the $3 noncustomer withdrawal fees at its ATMs.
Chase ATM customers in Illinois face $5 fees, while Texas locations are charging $4. PNC and TD Bank are also toying with higher ATM fees.
To put that jump into perspective, the average noncustomer withdrawal fee in 2010 was $2.33, according to Bankrate.com, with most big banks charging $3. And that’s up 5% from 2009.
But it’s also only half the equation.
Lest you forget that you’re two-timing your own bank, they tack on their own charge; last year, an average $1.41. All told, you’re spending at least $3.74 per visit, and likely even more.
ATM fees on both sides are meant to cover the cost of operating that machine and coordinating with another bank, plus a hefty measure thrown in for the convenience. This latest increase has a tinge of politicking to it, too, as banks protest the swipe fee limits of the Durbin Amendment. “It’s their way of sending a message to Capitol Hill,” says Dennis Moroney, a research director for Tower Group. “I don’t know how they came up with that $5. It seems excessive.”
Avoiding ATM fees has gotten easier, however, with free location-based apps from the banks themselves and other developers that help you find the nearest in-network machine for a free withdrawal. There’s also something to be said for getting cash back at store registers — at least there $3 gets you a magazine, or a few candy bars.
The sky-high ATM fees may not get pushed through, either.
Like airlines do with fare increases, banks often throw out new or higher fees, hoping their competitors will quickly follow suit and turn their test into widespread adoption. “If someone flinches, they pull it back,” Moroney says. Whether the flincher in this case will be Congress or unwilling consumers remains to be seen.
If it’s the latter, banks may have to resort to another suggestion from The Onion: “$1 for stopping in any TD branch location to warm up while out walking on a cold day.”
What’s your take — when is it worth it to pay an ATM fee?
Nickels and Dimes will keep tabs on new and rising fees and surcharges eating into your bottom line. Have one to share? Email firstname.lastname@example.org.