Banks Make Up For Their Subprime Losses By Charging You $3 To Use An ATM

JP Morgan Chase and Bank of America now charge $3 for non-customers to use their ATMs. Wachovia increased fees at a potion of its ATMs, and the average fee that your bank charges you to use another bank’s ATM has risen as well.

Why? Analysts say that its a direct result of the subprime meltdown. Faced with deteriorating investments, banks need to squeeze someone in order to make up for their mistakes.

That’s where you come in.

“If you need to hit your target, one of the easiest ways to do it is to raise your fees,” Keith Horowitz, a banking analyst at Citigroup Inc., told the WSJ “It falls straight to the bottom line.”

Banks deny that the ever-increasing fees have anything to do with their recent mortgage woes, naturally.

“We’re always looking for new sources of revenue,” says Mike McWhortor, a spokesman for the First Horizon National Bank, a regional bank that charges a $35 “not sufficient funds” fee.

Bruised Banks Salve Their Pain With More Fees for Consumers [WSJ]
(Photo:meghannmarco)

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  1. Shappie says:

    I thought WSJ was free online now…why does that link require one to register and pay?

  2. Greasy Thumb Guzik says:

    This is easily one of the biggest rip-offs in history!
    First they said that ATMs would cut costs & speed things up so people would have shorter lines at the tellers.
    Now they also charge for using the tellers.

    If the post office can deliver an actual envelope across the country for 41¢, the banks should be limited to charging that same amount for using an ATM!

  3. youbastid says:

    Man, I remember when it used to cost 25 cents to use another bank’s ATM, and only one bank charged you. So now it’s gonna be $6 every time? Sweet.

  4. jonsocko says:

    “We’re always looking for new sources of revenue.”

    How about providing your customers with new or better services, instead of hitting them with fees because your ATM network sucks?

  5. Shadowman615 says:

    By any chance, are they doing this “to better serve their customers?”

  6. cindel says:

    Yep, I was shocked when BOA charged $3.00 but I needed cash in a hurry.

    One of the local smaller bank used to charged 75 cents; it’s now $1.50.

  7. kelptocratic says:

    Another reason I love my Schwab checking account – they reimburse you for all these stupid fees. Plus, you know, 4% interest is awesome too.

  8. enm4r says:

    1) Don’t use other bank’s ATMs. They are a privilege.
    2) Pay the fee, it’s what you pay for the luxury of using another bank’s ATM, because they do not exist to serve non customer’s needs.
    3) Find a credit union that refunds your fees.

  9. ucdcsteve says:

    That’s the benefit of not using a brick and mortar bank (USAA)… They refund all fees up to $15 and don’t charge any of their own because they only have branches in TX. Big downside is the inability to deposit cash…

  10. Murph1908 says:

    This is one reason it’s actually good to be a BoA customer. There are ATMs freakin’ everywhere. I think pretty much every Royal Farms store in Maryland has one.

  11. skadoo323 says:

    You could use USAA (reimburses up to what I think is $15 in fees), Etrade (reimburses all ATM fees), UFB Direct (reimbursement amount varies on type of account, Fidelity or Schwab (reimburse all ATM fees..I think), then there always looking into a bank who has a large network of surcharge free atm’s, such as what ING is doing.

  12. ShortBus says:

    I haven’t used an ATM in probably five years. Why do people use them? I take out a small amount of cash every couple of weeks from my bank to pay for incidentals and use my CCs or debit card for the rest.

  13. soulman901 says:

    Is the ATM going to go the way of the Pay Phone? It sure seems like it and it sure seems like the banks want it to.

  14. savvy999 says:

    At some point in the near future, I expect the free ride on debit card cash-back to go away too.

    Retailers won’t cry, they hate cash-back; they not only pay a transaction fee on the purchase itself, but on top of that they are forced to become a de facto ATM, incurring extra costs managing and having extra hard currency on hand.

    I can’t tell you how many times I’ve wiped out a cashier’s drawer, had to wait for a manager to come over and give them a couple extra 20s, etc.

    But with ATM fees through the roof, it’s worth it to me.

  15. GOKOR says:

    Gotta love the Philly area where you can go into any WaWa and not pay a single fee unless your bank specifically charges you for not using their ATM.

  16. drjayphd says:

    (humps TD Banknorth and their policy of refunding other banks’ ATM fees)

  17. IphtashuFitz says:

    @ShortBus: I have a BoA account and there are BoA ATM’s just about everywhere around where I live. You practically can’t throw a rock without hitting one. There’s one at the grocery store I regularly use. There’s one across the street from where I work. There’s a number of them near various other places I frequent. They’re a LOT easier to use than trying to get to a bank between 9 and 5 and waiting in line for ever, especially since there aren’t as many BoA branches around here as there used to be.

  18. GOKOR says:

    @savvy999: So don’t go into a store and ask for a ton of money from the cashier’s till, jerk. lol. Seriously, go to the bank, not bankrupt a store.

  19. skadoo323 says:

    Good point about getting the cash back at a register when making a purchase.

  20. econobiker says:

    @skadoo323: I also call this the pack of gum cash back fee. Seriously, purchased a pack of gum 39¢ or so with tax and cash backed $200.

  21. Roadkill says:

    This makes the interest rate cut from e-trade a little less painful. Thank goodness for free ATM usage.

  22. emptydarkone says:

    Or better yet, if you know you’re going to need cash, go to your banks ATM and get the cash before you go. If nothing else, just use your friggin’ debit card to make the purchase. Even your favorite McDonald’s takes debit cards now. There are very few places that don’t take cards, so why even carry cash except for the occasional tip at a restaurant.

  23. Zgeg says:

    Enough is enough already.. I’m putting my money in my mattress… It is going to cost me more for the convinence of having them watch my money than it is for me to earn the crappy rate they are offering. If we all took our money out and kept in the mattress for a month I’m sure they would realize the error of their ways..

  24. zgori says:

    There’s no reason to pay any bank any fees for anything. They are using your deposits to make money — that should be enough. If they won’t waive all fees, find a bank that will. There are plenty.

  25. 1n0x1 says:

    There used to be a time when there was no charge for using another banks ATM. I am not sure if there are other banks that do this or not but USAA Federal Savings Bank, where I bank at, reimburses you ATM Surcharges up to $15/month.

  26. Balisong says:

    While I was away for a semeter at college, I would occasionally check my account balance (before I got online banking) at an atm. The place where I was didn’t have any branches of my bank so I always had to go to a different branch atm. Wasn’t until way way later that I discovered I was being charged $1 by my bank every time I just checked my balance – I wasn’t even withdrawing anything! What the hell was I paying for???

  27. mookiemookie says:

    It costs a bank to keep an ATM stocked with cash. Brinks doesn’t run a free cash delivery service you know. If a bank provides you a service, you should be expected to pay for it.

    That being said, being charged by your bank to use another bank’s ATM is garbage.

  28. QuantumRiff says:

    My bank doesn’t have any local ATM’s, and the other Credit unions in the area don’t have any “convienient” ATM’s, so I usually just go the store, get something I already need for $10, and ask for cash back. no fees..

  29. savvy999 says:

    @gokor: Jerk? Sweet.

    I am using the card and the system as it was designed. If they didn’t want me to get $60 cash back, then they should lower the limit, or get rid of it altogether, or ‘fee it’ to death.

    I predict banks will tack on a $1+ fee for cashback over a ridiculously low fixed amount (like $10). Anything over that, and you will be either forced to pay the fee, or go to an ATM (to hopefully pay even more fees). It’s coming, just wait.

  30. Michael Belisle says:

    Sometimes, to save the ATM fee that banks change non-customers, I use the Bank of America teller to conduct my Wells Fargo business. For some reason, I keep getting refused.

  31. socalrob of the 24 and a half century says:

    I’m not positive of when, but its at least within the past few months, BofA has raised their checking account fee’s. I Finally this month after being out of work for the past 5 months, went under $1000 in my checking account. The fee is $8.50. I used to be $5.00 .

    I unfortunately do not and never have had direct deposit so I have had to resort to keeping $1,000 in there at all times. I recently opened a Wamu account though since its free and will be switching there shortly. BofA blows.

  32. manok says:

    @ucdcsteve:

    I use usaa and when I need to deposit cash, I go to my local bank and have it turned into a cashiers check and then I use the “deposit at home” feature of USAA and scan the check into my account. Works like a charm.

  33. JiminyChristmas says:

    @Greasy Thumb Guzik: I was thinking the same thing. The ATMs were supposed to replace all of those expensive human beings who stand behind counters. Now ATM fees are a multibillion dollar revenue source for the banks.

    As for the fees, they’re bullshit. Look at it this way: Say a typical household puts $35,000/yr into their checking account. Unless you have many thousands of dollars in the account at all times, the bank isn’t likely paying you any interest. The bank then takes your deposits and invests them or loans them to other people.

    Assume the bank grosses a mere 5% profit from your checking account, that’s $1,750. If you ask me, that alone should cover a shitload of ATM transactions. Every fee the bank collects from you is pure gravy.

  34. chrisgeleven says:

    As others have said, the one major reason why I am a Bank of America customer is the fact that you almost have to look to find a city without an BoA ATM. This is a big deal for me, especially when there is a BoA ATM just a minute down the road from my home that I pass every day to/from work. Because of this, I don’t remember the last time I stopped at a BoA branch.

    For a customer that generates no revenue (direct deposit eliminates monthly checking account fee, automated transfers eliminate savings account fee, pays of BoA credit card in full every month), I have had nothing but excellent service from BoA.

  35. Unnamed Source says:

    Nothing like having to pay more money to access to the money you gave the bank to keep safe for you in the first place.

  36. NotATool says:

    Yes, just get cash back from grocery store or WalMart transactions on your credit card. Provided you pay your credit card off each month, this is a free loan which helps you earn credit card rewards that much faster.

  37. GOKOR says:

    @savvy999: Oh, well, yeah…if it’s only $60, and they offer cash back then they should have more in their drawers.

    Well, as long as the last five people aren’t also asking for $60 cash back. lol.

  38. stickfig says:

    2 months ago BOA charged us a 2.00 for another banks ATM use, then also charged us a BOA fee of 2.00 for using another bank’s ATM. total 4.00 fee to use an ATM.

  39. MBZ321 says:

    The best advice is to stay away from the “big banks” if you travel a lot and find a local one that is a member of the Allpoint network. Not only can you use the ATM’s of that bank for free, but there is no charge to use ATM’s in specific stores like CVS (pretty much on every corner anyway) and Target.

  40. MBZ321 says:

    Forgot to add the grocery store where I work, customers manually have to ask for cash back (although the cashier is supposed to ask), then the cashier had to manually add it on to the total…to discourage people getting cash back. A PITA, but they’re trying to keep costs down..

  41. loganmo says:

    About 3 years ago, I got an account with PNC…it was called Digital Checking. It was free, with no-min. balance as long as you had direct deposit, and did at least one bill-pay per month. The cool part of it was that PNC does not charge you to use another bank’s ATM AND PNC refunds other banks’ fees for using their fees. Eventually, they made the terms less inviting for new accounter holders (I think adding a min. balance), but I am still grandfathered into the old account. Even in Germany, I did not pay any fees for an ATM transaction (other than the currency exchange fee).

  42. loganmo says:

    Sorry, “…AND PNC refunds other banks’ fees for using their ATMs.”

  43. the_wiggle says:

    @enm4r: not to mention do cash back @ POS

  44. nuton2wheels says:

    I never, ever, ever use ATMs other than my bank’s. Although, if you purchase something at a grocery store that gives you cash back for ATM card purchases, there usually isn’t a fee involved. Prime example being Whole Foods.

  45. vastrightwing says:

    Finally you’re catching on… your mattress never charges you money to take your money. Your mattress will never steal from you. Your mattress will never charge you to keep your money there. Your mattress will never be rude. Your mattress is always soft. Your mattress is there for your 24 hours 7 days a week. Your mattress will never report your transactions to anyone.

    Why use a bank?

  46. firesign says:

    @vastrightwing: hope your bedroom never catches on fire.

  47. youbastid says:

    @vastrightwing: Too bad your mattress isn’t FDIC insured either.

  48. azntg says:

    @chrisgeleven: That one’s easy. Try New Orleans, LA. I haven’t seen a single BoA ATM there for miles! Also probably my neighborhood in NYC – no BoA branch within a 30 block radius.

  49. SacraBos says:

    @Shadowman615: Yes, and they take that very seriously.

    I used to use a branch of my bank in a grocery store when they had it. They actually posted a sign “Changing our hours to better serve you” – and they reduced their hours across the obard. I asked the person, exactly how did that serve me better? They couldn’t come up with an answer.

  50. Bunklung says:

    My credit union suggests (newsletters, etc) to it’s “investors” to go with the cash back at your local super market to avoid ATM fees. I’ve been doing this for years! Also, in Massachusetts (and other states), our credit union participates in the SUM program. All ATM transactions are free within the SUM network.
    [www.sum-atm.com]

  51. mac-phisto says:

    @savvy999: a regional bank near me actually charges for PINned transactions – 45 cents or so. i don’t predict banks tacking on a cashback fee…if you think about it, they’ve succeeded in forcing you into the transaction type that costs them the least. an atm owned by your bank costs money to service. an atm owned by a foreign bank charges your bank when you take money. merchants charge for PINned transactions, but they are by far the least expensive. & the merchant is paying for the cash shipments.

    the only thing that could be better is if you could take cash back thru the visa network…then they’d get an interchange fee, too.

  52. Corydon says:

    I was dragged up to a casino the other weekend with some friends and needed some cash for a bite to eat. I couldn’t believe that the casino’s ATM actually had the gall to charge me $2 to pull out money (at least 90% of which probably ends up going straight into the casino’s coffers anyways).

    The other shocker (although in hindsight it shouldn’t have been) is that the amounts they prompted me to withdraw started at $200 and went up to $1000.

    Next to them, the banks look positively saintly. I really cannot understand the lure of gambling.

  53. MFfan310 says:

    @mac-phisto: A lot of the credit unions(!) here charge for PIN transactions. (Yes, I said credit unions… just when you thought they could do no evil!)

    At least one of them lumps PIN transactions in with your 10 free non-credit-union ATM transactions every month… after that, you’ve got to pay $1 for each PIN transaction. And since a lot of people here use credit unions (and also because Wells Fargo, who charges a flat $1/month PIN fee, is one of the big “evil banks” here), a lot of independent merchants refuse to install PIN pads to lower their transaction costs because they won’t be able to after all.

    Not all of the big banks here are guilty of PIN fees, though: Chase, 5/3, and National City don’t charge PIN fees.

  54. mac-phisto says:

    @MFfan310: well that’s just silly!

    credit unions are just as guilty as banks when it comes to interchange fees. maybe moreso b/c they don’t have the capital to deploy massive, region or nation-wide atm locations. & card programs are very expensive.

    my credit union doesn’t charge for PINned transactions, but it does have a $1 foreign atm fee (no freebies & on top of what the foreign bank charges, so a boa w/d would cost me $4) & guess what…we don’t have any atm machines. =OP

    i stick with them for my main banking – loans, checking, etc., but i turned in my debit card & use electric checking w/ ing. i tell them about it every time i go in & ask the question “when are we getting an atm machine?” at every annual meeting.

    there’s rumors of them joining a no-surcharge atm network, so that’s promising.

  55. wolftrouble says:

    All these comments about cashback on retail transactions going away confuse me. As I understand it, retailers offer this only because they SAVE money – Cash-handling is expensive and tedious, and every dollar they can have on-balance from an electronic transaction is cheaper than counting out cash. Is this not true?

  56. furseekr says:

    Two things: 1) As long as it’s not early in the day when cash drawers have limited funds, retail stores like giving cash back on debit transactions because it reduces the amount of cash they deposit. Most banks charge commercial customers for each bill they deposit. 2) USAA rocks!

  57. furseekr says:

    Damn! A third thing: Most credit unions are part of the CO-OP ATM network which has a surprisingly large number of ATMs that don’t charge CU members fees on either end. In Portland, OR there are many more CO-OP ATMs than BofA, WAMU or Wells Fargo. They have an ATM locator at [www.co-opfs.org] .

  58. Parting says:

    Hello credit cards!!!! I haven’t used my debit cards for so long, that I forgot the pin. I only used electronic banking/credit cards.

  59. Parting says:

    Debit fees became a ripoff.

  60. Parting says:

    @wolftrouble: Yep, also they collect information on what type of shopping habits their REGULAR customers have. Repeat customers bring more money :)

  61. quagmire0 says:

    As a Chase customer, this doesn’t bother me in the least. They’ve done a pretty good job blanketing our area with ATM’s and making it so that I really never have to go to a different bank’s ATM and get charged. So it’s only fair that they charge a fee to non-bank customers to help cover that cost.

    The lesson is this: keep your checking account at the nearby bank with the most ATMs in your area. Since you’re probably not making much interest in checking (or none at all), which bank you go with should really be determined by how quickly (and cheaply) you can withdraw your money when you need it.

  62. elislider says:

    a “potion of ATMs” ?
    i’m not sure i’d want to be drinking that for any ailment

  63. Murph1908 says:

    @elislider:
    What level of caster do you have to be to make this item?

  64. SisterHavana says:

    @furseekr: My credit union is a member of that and the STAR Surcharge-Free network. Both of those rock!

  65. freedom69 says:

    @Greasy Thumb Guzik: If the biggest thing that you worry about is the fee ,you have a problem. You forget about the price of gas and arent taking into account the fact that you could always drive the 10 miles that it may take you to get to your own atm. when taking that into consideration a 3 dollar fee is nothing. Because im sure that your not driving an economic gas saving car, and im sure you leave lights on in rooms that your not sitting in so if you think about it I am 100% sure that 3 dollars isnt that big a deal to you when you look at all the other cash you give away.