Due to adjustments in federal banking laws and regulations established following the 2008 financial crisis, checking account fees have increased. Two of such adjustments include a limit on when banks are permitted to charge overdraft fees on ATM and debit card transactions, as well as a reduction in the fees that banks charge merchants for customers who pay with credit or debit cards. The result of these changes has been a hike in overdraft and ATM fees by lenders, as well as an increase in the amount of money consumers must keep in their bank account to avoid fees. Greg McBride, chief financial analyst at Bankrate.com says,
I expect fees to continue increasing in years to come, but at a modest pace consistent with what we saw this year, just as was the case prior to the onset of these regulations.”
Fees for using out-of-network ATMs have increased by 23% in the last five years, consistently reaching a new high for eight years in a row. The average ATM fee vary per city. Phoenix had the highest at $4.96 per transaction, and Cincinnati had the lowest at $3.75. Philadelphia, on the other had, sports the highest overdraft fee at $35.80.
Want to avoid these charges? Most bank websites allow their customers to find fee-free ATMs locally. Another option is to take advantage of the cash-back option when making purchases with a debit card. To avoid overdraft, many banks offer an email alert to warn consumers when their account is getting low.
Read more here- “Survey: ATM, Checking Overdraft Fees Surge,” (The Associated Press, CNBC)
Olivia is a graduate of Villanova University where she studied Economics and History, minoring in Gender and Women's Studies. She also has experience working with federal legislatures on health care policy, women's issues, and Internet safety.