Banking customers beware.
Selecting the wrong automated teller machine or bank in 1996 could be hazardous to your financial health.
Publicity and gnashing of teeth have greeted the announcement of each new bank fee this year, but you shouldn’t waste your time fretting. Instead, begin to set your own personal strategy.
“The most important new bank fee is the surcharge, which basically charges us twice to use an ATM once,” said Edmund Mierzwinski, consumer program director of the U.S. Public Research Group in Washington, D.C. “But also expect to see increased fees for use of computerized banking services, such as phoning to obtain balance information about your account.”
The fact banks are merging means an array of basic bank fees are going up around the country, Mierzwinski believes. His surveys indicate fees are higher at large institutions, particularly those owned by out-of-state holding companies.
A year ago, it was First National Bank of Chicago’s instituting charges for using a human teller in some cases instead of an ATM or telephone banking system that gained attention.
This time around, the ATM is the culprit. The fee for making an ATM transaction at a bank other than your own could conceivably rise to more than double the current average charge of $1.18. Such surcharges are expected to extend to 60 percent of all banks by the end of this year, a preliminary poll of banks indicates.
That’s because most ATM networks in April began permitting their member financial institutions to put the surcharge on transactions. Since most banks already charge their customers a fee when they use an ATM outside of the bank’s network of machines, the cost of a single electronic banking transaction could be more than $2.50.
“This is moving to a free market environment that should lead to deploying of more ATMs, giving consumers more choices between locations they can use,” said Henry Mundt, president and chief executive officer of MasterCard/Cirrus Network, which has 260,000 ATMs.
The ATMs in that network which require the surcharge must display a plaque disclosing that fact and also give the customer a chance to opt out through an on-screen message before a transaction begins. So it’s up to you.
“To reduce your future surcharges, consider making larger withdrawals rather than a number of smaller ones,” suggested John Hall, a spokesman with the American Bankers Association in Washington, D.C.
Most banks are taking their time about enacting the surcharge, in part to avoid the sort of negative publicity that accompanied First Chicago’s human teller fee last year. However, the handwriting may be on the wall. ATM surcharges were already in effect in 15 states that previously allowed the fees, and, in most cases, the trend has been for most banks to eventually fall in line with the surcharge.
Some banks have reason not to follow along.
“We were opposed to the surcharge within the networks and voted against it because, after all, we have 680 machines of our own that are easy to find and that we actively encourage our customers to use,” said Thomas Kelly, assistant vice president with First National Bank of Chicago, a part of the Cash Station and MagicLand ATM networks.
The bottom line is obvious.
“Consumers must watch the ATM they use when doing transactions,” said Susan Weeks, vice president for public affairs at Citibank, which also hasn’t enacted the surcharge. “It’s becoming more complex these days, so consumers must look at the total value of services from banks when deciding which fit their needs.”
Some ways to avoid bank fees:
– Re-evaluate your accounts to make sure you’re using the service that best reflects your ATM habits, the number of checks you write each month and typical account balances.
– Shop for the best deals, realizing that by keeping all your accounts together at one institution, you’re more likely to receive favorable treatment.
– Request a fee schedule. Scrutinize your monthly statement so you know exactly what services you’re paying for.
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Andrew Leckey, who co-anchors the “Today’s Business” program on the CNBC cable television network each weekday from 5 to 7 a.m., appears in Business on Sunday and in Your Money on Monday and Thursday.
