Nov 17, 2008 7:38 pm US/Eastern
ATM Fees Skyrocket At Many Major Banks
Word Of Advice: Avoid Machines Not Affiliated With Your Financial Institution Or You Will Pay Big
NEW YORK (CBS) ―
Citigroup is not the only bank grappling with tremendous losses. Many financial institutions are hiking customer fees at record levels.
It may be quick and easy, but that ATM convenience is going to cost you. Citibank, Chase, Bank of America and Wells Fargo are all starting to charge non-customers as much as $3 per transaction to use their machines.
"I think it's kind of ridiculous because everybody is going through economic hardships," New Yorker said Margo Waltz said.
And that's not all. Citibank now hits customers with a $10 charge overdraft protection fee every time they need to dip into your savings account to cover a checking account shortfall.
"$10 seems a bit excessive," another New Yorker said.
Customers say they feel nickel and dimed, but consumer advocates charge it's more like highway robbery on taxpayers who've already footed the bailout bill for many financial institutions.
"It's the lower income people who are paying the price for the banks' bad decisions," said Sarah Ludwig, executive director of the Neighborhood Economic Development Advocacy Project. "It's the students and older people."
Other fees include a $3 surcharge to use your debit card at a PNC Bank teller to take a cash advance. Bank of America added $5 to its overdraft fee -- now a whopping $25 for the first day and $35 each subsequent day.
Several banks are also boosting minimum account balance requirements and experts warn this is just the beginning as banks merge or go belly-up.
"The fewer banks you have the fewer choices consumers have the more a sort of gotcha the banks have," Ludwig said.
One alternative experts are suggesting is checking out your local credit union.
"They're not going to gouge their members because their members are the people who run the credit union," Ludwig said.
States currently control interest rates, which are practically unlimited. Consumer advocates are calling on the Federal Reserve to step in as they did after the 1989 savings and loan bailout. They want interest rates and fees capped.
It's estimated banks collected $17 billion in overdraft fees last year alone.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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