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.
More on Money Now
This is to hit the low income (sorry if this stings...uneducated) people in the wallet. If you have $18 in the bank and they charge you $3.00 and your bank charges you $2.50 you are paying 45% to borrow the $12 you will be able to take out. It is a move to entrap the low income into paying a bounce fee at their bank. I am surprised the government hasn't stepped in to say...NO! You will not take advantage of the uneducated.
Wake up! When they tell you it is good, it is only GOOD for the banks!!
Insert "Bank of America" in this article and there would still be no surprise.
Copyright © 2013 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
Reports say the generous benefactor behind the huge gratuities is a former PayPal executive.
- Chinese investors are buying up Detroit
- Mega Millions jackpot hits $344 million
- 5 reasons to think twice about a balance transfer card
- Will I have to pay taxes because of a foreclosed home?
- 5 things that won't affect your credit scores
- The 7 deadly sins of winter driving
- 8 questions to ask before Mom and Dad move in
- High deductibles fuel new worries of Obamacare sticker shock
- How to use your credit card to donate to charity
[BRIEFING.COM] The major averages spent the entire session in a steady downtrend, but despite persistent selling pressure, today's losses were limited in scope. The Dow, S&P 500, and Nasdaq shed between 0.2% and 0.3% while the Russell 2000 lagged, falling 0.9%.
The underperformance of the Russell 2000 was likely owed in part to tax-loss selling, which tends to pick up this time of year. Small-caps often feel that pinch in a stronger fashion than large-cap issues since individual ... More
More Market News
John Stumpf acknowledges that growth has been slow, but he says he's still optimistic.