ATM charges $3 to give you $1
A crop of new machines that dispense small bills and even coins could end up costing customers much more in fees.
A crop of small-bill ATMs is sprouting up across the U.S., but consumers could end up spending more in fees than they withdraw.
JPMorgan Chase (JPM) has installed as many as 400 ATMs that dispense bills in denominations from $1 to $100, while PNC (PNC) has upgraded more than half of its 7,200 ATMs to dispense $1 and $5 bills, reports CNN.
While the ATMs are free for customers of the banks, consumers who use an out-of-network ATM will face the same fees as someone who takes out larger amounts: $3 for out-of-network customers, plus potentially an additional fee of about $1.60 from the customer's own bank.
That might hit some of the banks' customers hard, especially those most likely to use the new feature: consumers with small account balances.
The banks want to appeal to customers with low-income account balances, or those who might want to withdraw less than $20 or an amount between $20 to $40, Bankrate.com senior financial analyst Greg McBride told CNN.
"Particularly in difficult financial times when peoples' account balances have been lower, not having to withdraw more money than you really need is helpful," McBride said.
Some of Chase's new machines will soon dispense coins. The bank plans to pilot that service, and then expand it across the country.
For the bank, the benefit is increased efficiency and less need for additional staffing, Chase's head of branch innovation told CNN. He described the machines as "next-generation ATMs or new teller platforms,' which include capabilities such as paying credit card bills.
While the ATMs might offer more flexibility, consumers might want to make sure they're sticking with their own bank's ATMs when taking out a few dollars for lunch -- otherwise, that $5 sandwich could end up costing upwards of $8.
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I think this is a great idea, but the bank and/or this article is pitching it all wrong. It's not just for customers with a bank balance of less than $20. I frequently have to go through the drive-thru teller window at the bank and write myself out a check to cash in order to get ones, five, or tens because my kids need $6 for a field trip or $12 to pitch in for the holiday party at school. It's not the teacher's job to make change for all the parents in class who just have a $20. How many times have you been at the grocery store, or behind someone at the grocery store asking the cashier to break a twenty? Why is it the grocery stores responsibility to order extra cash to meet our need for small change? And why would I want to waste money buying a pack of gum when all I really want is the change from said pack of gum?
Once when I had absolutely no cash, I picked my son up from school to learn that he'd lost a tooth so I had to write a covert note to the drive-thru teller at the bank when withdrawing money to make sure that she gave me back some of my cash in ones so that I could be tooth fairy for the evening without my son waking up to a pile of nickels. In cases like this it doesn't matter how much money you have in the bank if your kid's pillow isn't set up to accept credit cards.
I also always try to have cash on hand so that I can tip appropriately. When we go on vacation or my husband travels for work I always go to the bank to get extra fives for housekeeping, etc so that I don't have to go to the front desk for change all the time or waste money at the gift shop by breaking bills. Having correct change IS an important part of smart budgeting. I'm glad I'm a Chase customer.
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