When Will the Sucking Stop?

The Denver Business Journal recently ran an article about banks that don’t charge ATM surcharge fees. Is this news? You probably talking back to your screen right now saying “Yes, of course that’s news!” or “What banks! I need some cash now.” Or if you’re loyal to your credit union you might be thinking “Silly banks, don’t they know that free is for credit unions.”

Well you’re all wrong. This isn’t “new” but it probably is newsworthy. In September announced the increase of ATM surcharge fees to a whopping $3.00. That’s a huge jump from what they charged back in the early 1990’s—nothing. That’s right in the good ol’ days all ATMs were free. Then on April 1, 1996 the ATM networks, PLUS and Cirrus, caved to pressure from the big banks to introduce surcharge fees. Fees were small at first and many people didn’t mind paying the nominal amount in exchange for convenience. Then as consumers became addicted to easy access the fees grew and grew and are still growing.

And if you think that the reason for the increased fee amount is a natural rise in the cost of ATM business you’re not even half right. There is a cost associated with ATM operations. The machines themselves require operation costs and there is a network cost. The network cost comes from the provider such as Plus or Cirrus to offer the service of linking remote ATMs between financial institutions. However, these costs are minimal to the gains banks receive. For one thing ATMs allow them to be anywhere—sort of like mini-branches—without the costs of buildings, staff, etc. This in turn provides cheap marketing and helps them to hook more consumers as customers. And then the fee itself greatly outweighs the costs, so banks get to pocket most of the surcharge fee.

And so you wonder “how did these fees get so out-of-control?” Sadly, it’s not the banks fault. It’s ours. Yes, it’s even my fault. Because we’re willing to pay to get our own money. But, we’re not entirely complacent. There have been several attempts to eliminate ATM surcharge fees, but the bank lobbyist use their heavy wallets to squash these endeavors. Plus the banks claim that they can continue to drive fees up because the market (meaning us) indicates greater demand for ATM services.
So isn’t it time that the market spoke up and got control of this beast? Think it’s impossible to beat the big guys? Check this out.

• The CO-OP ATM network that Coors Credit Union and many others participate in has over 25,000 ATMs nationwide. Bank of America ATMs only has 16,000.
• Credit unions in the network also enjoy no-surcharge access to ATMs at Costco and 7-Eleven stores. No banks have this privilege.

The best defense against rising ATM surcharges is simple—DON’T PAY FOR YOUR OWN MONEY. Take a little time to map the CO-OP ATMs around where you work, live and play. When you’re in a bind find the independent banks that don’t surcharge or use the handy Cash Back option in stores.