ATM fees have reached all-time highs for the third consecutive year according to new information from Bankrate.
It creates financial challenges for consumers who increasingly rely on cashless payments but still need physical money in certain situations.
ATM fees now average $4.86 per transaction — that's up 2% from last year.
Stephen Kates, a financial analyst for Bankrate, said the rising fees create a particularly difficult situation for modern consumers.
"It's particularly difficult because people are using cash less and less," Kates said. "And when they need it, they need it now."
The trend creates what Kates describes as a trap for consumers. Many people no longer carry cash regularly, instead using credit cards or mobile payment apps like Apple Pay for daily transactions. However, when they suddenly need cash for situations like tipping while traveling, they're forced to use whatever ATM is available, regardless of the fees charged.
ATM fees aren't the only expensive encounter you can have with your bank.
Overdraft fees remain costly despite slight decline
While overdraft fees have decreased slightly in recent years, they still average nearly $27 per transaction, and 94% of checking accounts continue to charge these fees.
Kates recommends consumers take proactive steps to avoid overdraft charges by checking their available balance before making purchases and connecting a savings account to their checking account as a backup funding source.
Some banks offer grace periods that waive one or two overdrafts per year or provide customers with 24 hours to transfer money before charging fees.
Interest-bearing checking accounts offer minimal benefits
For most consumers, interest-bearing checking accounts aren't worth the requirements, according to Kates. Banks typically require nearly $10,000 in average balance to avoid monthly maintenance charges while only paying around 0.05% to 0.1% interest.
"That's nothing. It really is inconsequential given the amount of hoops you have to jump through," Kates said.
Instead, he recommends pairing a non-interest checking account with minimal or no fees with a high-yield savings account for earning interest.
Finding the right banking relationship
While avoiding all banking fees requires effort, Kates said the key is finding a bank that fits your lifestyle rather than changing your habits to meet the bank's requirements.
"Find the banking relationship that's going to work for you the best," Kates said. "You don't have to feel like you're getting nickeled and dimed or jumping through hoops."
This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
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