ATM fees hit all-time high; consumers may pay $4.3 billion this year

Scott Clark is a 20-year-old junior at Southeast Missouri State who works part time while attending college full time. So Clark says he doesn't have extra money to waste on ATM fees.

So Clark avoids ATMs whenever he can. But when he has to use an ATM, he tries to avoid the fees, too.

"I will drive to Jackson to use an ATM from my bank first, which I realized the other day was stupid because the fee is probably about the same amount as the gas," Clark said.

Still, Americans are making the extra effort to avoid fees. According to Bankrate.com's latest survey of large banks, ATM fees have hit a record high. The semiannual survey looks at the checking accounts and ATM fees offered by the largest banks in each of the 25 largest markets and compares them to a sampling of checking accounts available at online banks.

The study found that the fee for using the "wrong" automated teller machine -- one owned by a bank where you don't have an account -- hit an all-time high. No banks charge their own customers for using their own ATMs. But customers are charged twice for foreign transactions -- a single withdrawal once that the other bank charges and again for the customer's bank, for a total average fee of $2.91.Bankrate.com estimates that American consumers will pay more than $4.3 billion in withdrawal fees in 2005 for using ATMs not owned by their bank.

Jean Clements of Bank of Missouri, which has branches in Perryville, Jackson, Cape Girardeau, Marble Hill and Columbia, said it usually works like this: A customer's home bank charges about $1 for foreign transactions and the other bank charges about $1.50.

Still, Clement said, people understand the deal.

"I think it's sort of a given," she said. "People who use it regularly know that there's going to be a charge."

John Hall, spokesman for the American Bankers Association, said it's all about choice, freedom and convenience.

Such fees, he said, are avoidable by simply using a teller machine at the customer's home bank, where transactions are free. They can also avoid fees by getting cash back when they buy something with a debit card.

"Or they can choose to go to a bank that's not their bank and pay a fee," Hall said. "That's a choice you have. Today you can go to Europe with just an ATM card and know that cash will be delivered to you wherever you are. It's all about convenience."

Hall said the fee is in place to allow customers to use another bank's network. Then there's a processing fee from the customer's home bank for completing the transaction with a competitor.

Jay Knudtson, mayor of Cape Girardeau and executive vice president for First Missouri State Bank, said consumers should also research banks before making a choice. Many banks are part of a broader network of competing banks that don't charge foreign transaction fees. For example, First Missouri State Bank customers aren't charged such a fee when they use Regions Bank ATMs, he said.

Still, Knudtson said, larger banks with large networks have to pay for them somehow.

"Admittedly, there is some major revenue that certain banks are receiving for that," he said. "That's how they're sometimes able to recover their costs for the investments they made."

While ATM fees annoy some, other customers know it's the convenience they're paying for.

"I don't mind paying for the convenience," said Donna Taake of Jackson. "If I were organized, I could avoid it. But sometimes you need the cash and it comes in handy. I try not to do it very often, but when I need it, I'm glad it's there."

Features editor Callie Clark Miller contributed to this report.

smoyers@semissourian.com

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