Out-of-network ATM fees, overdraft charges hit record, survey says

It's costing consumers more and more to get ahold of their own money.

The average fee consumers pay to withdraw cash from an ATM outside their bank's network is a record $4.52 per transaction, according to a new survey from Bankrate.com.

That amount is a combination of two fees, rather than one, which may come as a surprise to some consumers.

"Your bank, the majority of the time, is going to charge you,'' says Greg McBride, chief financial analyst for Bankrate.com, a personal finance website. "And almost without fail the ATM owner is (also) going to charge."

You'll likely pay more in Atlanta, where out-of-network transactions average $5.15, and a lot less in San Francisco, where the typical fee is $3.85, the survey found.

Fees for using an out-of-network ATM have increased 21% over the past five years. That could be due in part to the fact that fewer people are using ATMs, but banks still have to pay to maintain them, says Columbia Business School Professor Patrick Bolton, who has studied banking and economics.

"There seems to be less use of ATMs, and that would almost automatically give you a higher cost,'' Bolton says. "The other potential related reason is that ... sometimes those fees are waived for good clients by banks. And so, if those fees are waived for some clients, they have to be paid for more by others.''

A study of 70 financial institutions commissioned by PULSE, the nation's third-largest ATM and debit network, in the first quarter of the year found that the average debit card was used to conduct two ATM transactions per month in 2014. That was down from 3.4 ATM transactions per month in 2005 — a 41% decline.

"What's driving that decline is the increasing use of debit cards for small ticket transactions,'' says Steve Sievert, PULSE's executive vice president of marketing. "In 2005, it was pretty uncommon for consumers to use a debit card to do a transaction of less than $10 or $5. Today consumers don't give a second thought to using a debit card for a cup of coffee. ... Because of that, consumers generally don't carry as much cash as they did back in 2005.''

Among all debit transactions today, 54% are less than $20 he said.

Additionally, ATM transactions are declining because of the "ubiquity of being able to get cash at point of sale in a cash back transaction, be it at a grocery store, or drug store,'' Sievert says. "Cash back" refers to the money a customer can ask for, when they are paying for a purchase.

Nearly a quarter of people will do almost anything to sidestep a surcharge at an ATM, according to a survey of 3,000 adults taken last November by Mercator Advisory Group, a consulting company.

Besides being able to use a debit card, rather than cash to pay for transactions ranging from a cab ride to lunch at a local cafe, "the cash-back option is also a way of getting around these fees,'' said Bolton.

"So obviously, once you know you're at risk of paying $5 for a withdrawal ... you would respond by looking for alternatives," he says.

Even if customers stick with their own bank, they are likely to encounter record high fees in areas beyond ATM use — such as for overdrawing on an account. Overdraft charges average $33.07, up 9% since 2010, according to the Bankrate survey of 10 banks and thrifts in each of 25 large U.S. markets between July 9 and Aug. 5.

Bolton says that banks are increasingly reliant on an array of fees to boost revenue.

"They're earning almost no money on deposits,'' he says, " but they're paying fixed costs; branch costs, ATM costs, and somehow they have to recoup on those costs. If you can't earn it on the interest spread, you earn it through fees.''

There are ways to not lose out when trying to access your own money.

"With ATM fees, plan ahead as to where and when you make the withdrawals so you stay inside the network," Bankrate.com's McBride says. "If you are in a pinch for cash, use your debit card at point of sale to get cash back."

And to avoid overdrafts, go online or tap into your bank's mobile app to monitor your available balance before making a purchase or conducting another transaction. "Sign up for email or text alerts for when your balance gets below a certain level," McBride says, "and request a link between your checking account and savings account so that your money covers any shortfall rather than the bank's money."

Follow Charisse Jones on Twitter: @charissejones.