Today while shopping in Minneapolis' IDS Center, I stopped at an ATM machine to get cash. Since there were no machines available from my own bank, I used another's. Of course, I had no choice but to accept the $2.00 fee that the other bank charged me, and I'm sure that I'll face another fee from my own bank. Now, banks have said that they'll keep charging these fees as long as people tolerate them, and so far the market seems willing to bear the cost. You can try to use a machine from the same network that your bank uses, but I don't think too many people are savvy enough to look at their card's network provider, not to mention to that of the ATM machine. I'm willing to pay the fee for the sake of convenience access to money, but I sure wish the fees were lower.
So I found myself thinking just how the banks would know whether or not "the market" was tolerating their costs. How would they ever know whether potential customers were avoiding their cash machines? Sure, they could tell if their month-by-month percentage of out-of-network transactions decreased, but it occurred to me that an even stronger indication that the cost was too much would be if the customer cancelled their transaction at the point when they were told that they would be charged the extra $2.00 fee, in addition to fees from their own bank. That would be a clear sign to the banks that their fees were no longer so tolerable.
So here's my idea: whenever you're forced to use an out-of-network bank machine because you're not close to one of your own bank's machines, cancel the transaction where you see the screen about the extra fee. Then either start the transaction over to get your money, or, better yet, move to another nearby machine. You will still be paying the extra fee, true, but for the cost of a few seconds you'll be sending the banks anonymous feedback that could save us all some money in the future.
Comments (3)
December 27, 2008
10:04PM | #
That doesn't sound like a very good sign to me. You've just told a bank that you don't bank with that you're willing to go find an atm machine from your bank. Maybe you cost them 2 or 3 dollars.
A better signal would be to move your checking to a bank like etrade where they reimburse you for all atm fees no matter what machine you use. Some credit unions do the same. I haven't paid an atm fee in over 5 years.
December 28, 2008
9:18AM | #
Mike,
Your idea might work for some, but I don't agree that reimbursement would really save most people money. Sure, you can use a bank which reimburses you for any non-network ATM fees you incur, but are you sure that you haven't paid for them in another manner? Just how do you think the bank funds the payments for those ATM fees? May of them cap the monthly reimbursement at a very small dollar amount (I know Etrade doesn't), require a relatively high minimum balance to qualify for any reimbursements, or charge high fees for some other account activity.
If you use an ATM machine as often as I do in a month, then your bank could be paying anywhere from $20-$30 per month. I'm willing to bet that the bank isn't paying that per account per month just to keep customers... they're charging it back to you somehow.
December 28, 2008
6:28PM | #
My solution to this problem is to take out more money so the percentage is much lower. For example, instead of withdrawing the minimum $20, withdraw $200. The fee is the same, so the fee paid is 90% less. Simple math.