New ATM Fees
 

An excerpt from an article in the Wall St Journal today:

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Bank of America Corp. plans in November to up the fee it charges customers to use most automated teller machines abroad by more than 50% to $5, from $3. Bank of America is one of the largest banks in the U.S. with the biggest network of ATMs in the country.

In June, Citibank, a unit of Citigroup Inc., raised its withdrawal fee at non-Citibank ATMs to $1.50 from $1 for some accounts, affecting both transactions here and abroad.

Many banks already have high rates for ATM withdrawals abroad, taking into account the additional currency-exchange fees. J.P. Morgan Chase & Co., for example, charges customers who take money out in foreign countries $3 plus an additional 2% of the withdrawal to cover conversion costs.

At U.S. Bancorp, foreign withdrawals cost $1.50 plus a 3% exchange fee.

Wachovia Corp. charges $2 to withdraw money abroad, while Wells Fargo & Co. charges as much as $3 outside the U.S.

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The article also notes that Bank of America will not charge the fee if the withdrawal is from banks in its global network, but you need to find out ahead of time where those banks are, Also CitiBank waives the fee for customers with more than $6000 (but it doesn't say what happens if your withdrawals while you're traveling bring your balance below that amount).

One bank that doesn't charge such fees (at least not yet) is Commerce Bank. Also, the article suggests getting cash back from a debit card transaction as a way to avoid the ATM fees.

Another attempt by the banking industry to milk the ATM cash cow. I suppose it comes with the usual BS "rationale" about increasing costs, etc., etc,

I have an account thru Met Life bank and they actually refund any fees charges up to a certain amount. I think its up to $15 a month.

I think that the banks are doing this because the ATM has become a way of life and people no longer convert currency before they go abroad. Its a shame.

I have a Certificate of Deposit with Citibank and in exchange they don't charge me any service fees for my US savings or checking accounts, including foreign and ATM charges (which is good cause I live in Swizterland). The CD earns a little interest, I can get to the funds quickly if I need them in an emergency, and I have no bank charges, it's a good deal for me. Ask if your bank will do the same.

This small shareholder thinks it is an excellent decision by Bank of America.

This small customer is happy that he finally left BOA last year.

That, Clifton, is why the free enterprise system works - we are both satisfied albiet for different reasons.

I was a dedicated B of A customer when I lived in California. Now they have appeared in NY/NJ as they take over Fleet bank.

Frankly I moved over to Washington Mutual. They give better interest rates...

BTW, in case you didn't know, Washington Mutual never charges you to use their ATM's if you are from another bank.

I can see a bank (not your own) charging you to use their ATM since they have to do extra work becasue of it (fill it with money, maintain it etc) but it doens't cose YOUR own bank anything for you to use another persons bank!

I pay, on average, GBP 10.00 (that's $18) for an ATM withdrawal on the continent. I have accounts at two of the biggest banks in the UK and both charge about the same.

walkinaround, OUCH!
I pay no fees at all for ATM withdrawals outside the US as long as they are Star or Cirrus system. Have usually found the exchange rates to be excellent. My bank is a regional one, and we have substantial funds there.

j, I can't argue with that. I agree now as I agreed with the service recovery rep when she said the same.

I was speaking to Bank of America customer service just yesterday, inquiring about foreign ATM fees.

They claimed $3 per transaction (true) and that there is Zero % markup or added margin to the interbank exchange rate.

>>> Can anyone vouch for the 0% adder to the exchange rate?

The upcoming $5 per withdrawal fee is already such an insult.

For BofA Visa credit card purchases, they claim a 3% added fee to the interbank exchange rate, and No additional "per transaction" fee. Supposedly 1% goes to Visa and 2% to BofA (or vice versa).

I don't always have much confidence in the accuracy of any customer service's verbal statements. It's probably why they never do it in writing or list it in their web site, it leaves too much of a paper trail. On the phone it's just your word against their (possibly wrong) word.

The basic problem with the article is it doesn't make a lot of sense. My bank is Bank of America and I withdrew money from ATM's about 20 times this summer in Europe. Most of them were their global network banks and there was no charge. After that I am allowed two free ATM withdrawals per month from any bank anywhere without charge. Then I had a total of two additional ones that cost exactly $1.50 each. So what's this thing about the current charge of $3? They've never ever charged me $3.

But by the way, I was also told that now Visa services is handling more and more ATM accounts in Europe for foreign exchange. When they do they now add 1% hidden in the exchange rate, just as they do with credit card transactions.

Weird. Tom, I swear your post didn't appear on my screen when I posted, although I see it is timed two hours ago! In any case, maybe I've answered your question? One of the people who told me about the extra 1% charge on all their ATM withdrawals was the manager of a Deutsch Bank in Rome. He said their bank is forbidden by law to make any charges, but since all the actual transactions are signed over to VISA services, that's where the 1% gets added.

Patrick--BofA has always charged me $3 for withdrawal outside the U.S. (except with affiliates ) and $1.50 for a non BofA bank in the US. You must have a high deposit with them to get other services.

Patrick...

The two major shared teller networks for years have been and are Plus and Cirrus. Plus is a wholly owned part of visa while cirrus is a wholly owned part of MC. To the best of my knowledge, they have always added the 1% above interbank fee to all ATM transactions.

Now also, for years and I believe it is still so, the rules of these shared teller networks prohibit banks from adding additional fees for using their machines. For that reason, I have never paid a fee to a European bank for an ATM withdrawal. And since I have a citibank account with a high balance, I get unlimited free ATM withdrawals on their end so I don't pay fees. The exchange rate seems to be 1% above interbank.

Several have told me that while this is true at bank ATM's, private ATM's are free to charge fees for their use. I assume they are telling me the truth so I am just passing along the info.

Also many Canadians have told me they are charged the additional fee by many Texas banks; all I can say is that perhaps the transaction is not routed through Cirrus or Plus. I do know that on the Citibank machines in NY, there is a notice that Citibank will impose a fee of $1 on all US issued cash withdrawls implying non US cash withdrawals are not subject to this fee.

YIKES!!!!! You guys....

1. Take larger amounts of money from ATM's so the fee impact is less.

2. Go back to using travelers checks

3. Use the barter system instead. Trade a lipstick for a dessert at a restaurant.

4. You are spending thousands of dollars going to Europe. Are you going to fret over an ATM fee?

Speaking about the basic ATM withdrawal charges, I can't get too excited, upset or concerned about a charge of two or so dollars for a withdrawal. Hell, I'm probably spending a few thousand dollars on the trip, so why bother changing banks because mine might charge me a total of maybe a meagre $10 or $20 for a few withdrawals.

At Bank of America I do have an "Advantage" account. High deposit? Hardly. I'm not sure what I did to get it. I have no savings there and don't keep a balance over a couple hundred in my checking account. But I do have an Equity Credit Line with them. That's all. My partner gets the same benefits and he has a senior account with them -- again no savings or other deposits with them and no minimum balance.

Howard and richardab, you are both right, of course. It isn't worth fretting over. But this is no more bizarre than all the screaming people do about getting a hundred dollars in advance for their "comfort" and having it cost maybe $5 or so to do it.

xyz, you may be right about always having that extra 1%, I don't know. But many here have always insisted that ATM's didn't carry that foreign exchange fee. I do know that the guy at Deutsche Bank said they were getting some flack from regular customers about the new 1% addition. This was along with that new deal that says if your ATM card has no Visa logo on it (meaning it's an ATM only card -- no debit) that it won't work in their ATMs, even though it may also be Cirrus or Plus. Just telling you what he told me.

Bartering in Europe--Hershey bars, Lucky Strike cigarettes, and sheer stockings are proven winners.

Hey guys...

You're right of course. In the scheme of things, the little fees here and the little fees there are not going to cause anybody to go broke.

But we're all creatures who like to save as much money as possible whenever possible and sometimes, little things add up to well more little things (how stupid of me!)

However, being a proponent of using cc's every place they are taken, I rarely spend cash whether on travel at home, whether for every day necessities at home, whether for travel in Europe or whatever. So I usually hit the ATM's for amounts equivalent to $10 or $20 at a time and if I have to pay $3, that is a 30% fee and that hurts. Of course the solution would be to pay cash for everything but that violates my (and only my) sense of the proper way to handle money!

But then again, as I always say, to each his or her own.

speak for yourself, xyz, no we are not "all" creatures who obsess over minor fees like you do. YOu aren't much of a finance expert if you can't manage your money well enough to avoid constantly taking out small sums of $10-$20 from ATMs. My few minor ATM withdrawal fees do NOT add up to more because I don't do that, I only use one a couple times a week, and I don't spend that much money, in general. I spend more on coffee on my trips than ATM fees.

Ah Christina I think you missed the point....

When I travel, I don't like walking around with large amounts of cash. I just don't need it. I don't buy newspapers anymore, I use internet cafes to read the newspapers I am most interested in. I don't make pay phone calls anymore, I use a mobile phone. Breakfast is usually included with the hotel room which of course ultimately is charged. Lunch...many McD's or local fast food places, if I eat there or whatever, take cc's as do low priced full service restaurants. Or I go into a grocery and take out ready made sandwiches or something. They take cc's. Local transport in most parts of the world take cc's. Eating dinner at any sort of restaurant takes cc's. Leisure activities such as the theatre take cc's. Let's see, during my recent trip to London about the only places I can think of where I needed to pay cash was at pubs for a pint or two and at the theatre for ice cream at half time (ouch £2.50 for a small cup of ice cream hurts) and my usual £1 at the local internet cafe each morning to check my e mail and read the NY Times, the NY Daily News, the NY Post, Newsday, USA Today...so I could probably live on a £20 cash withdrawal for 3 or 4 days! But as I said, that's the way I prefer to do business. Others prefer cash and that indeed is their business. I only give advice as to what I consider the best way to handle finances and makes the most sense to me!

This is why I love my credit union. No ATM fees anywhere in the world.

xyz123 is made the point very emphatically that some of us have been trying to get across here and on the thread about buying euro before departing: Make a decision on what's best for you and don't belittle someone who may not agree with you!

Today, the biggest budget buster is surely the Euro-to-USD exchange rate: 1E= $0.805

Still, no one enjoys getting gouged on the transaction fees. The true underlying cost of the transaction is just pennies ... it's all computerized. The increasing fees exist purely to jack up bank profits and earn hefty multi-million $ bonuses for the executives, not because there is an increase in the underlying cost of doing business.

I was doing this ATM research on behalf of my 20yr old college son, who'll be spending 4-5 months in europe starting in 2005. His habit now, is to make small $40-60 cash withdrawals.

He'll have to learn to safeguard his cash more carefully, and make larger withdrawals abroad, so that the ATM fees don't drain his account.

xyz, like you I would prefer to use my credit card everywhere. But we are going to Italy, and many places there don't accept credit cards. Or they may offer discounts for payment in cash -- which I know in the US merchants are not supposed to do, but I think the practice is common in Italy.

At any rate, I expect to have to use the ATM in Italy a lot more than I would in other countries.

nonnafelice, where did you get the idea that many places in Italy don't accept credit cards? That certainly has not be my experience during three trips there in the past five years to cities large and small! In fact, we found it just the opposite, i.e., the number of places that didn't accept credits were few and far between.

Count me amongst the group of people who count ATM bank transaction charges as chump change. On a recent trip, I made two ATM transactions for a whopping total of $6USD in fees. I never thought of fretting over this as a beer cost more than that. Let's just call it a vacation convenience fee.

While we're at it, I also don't understand why people have the Visa/Mastercard feature of their debit cards disabled before a trip. Makes no sense to me.

I agree with nonnafelice. Yes, more and more small businesses in Italy do accept credit cards but they also do give discounts if you pay in cash. Even hotels. Believe me, I know.

KS452, some people disable the Visa/MC feature of their atm card ("debit card") so that no unauthorized purchases can be made if the card is stolen (using the card as if it were a 'credit' card). Only the PIN-access function will work.

My new strategy for upcoming trip is to open a free chkng acct, get a debit or atm card, fund it with only the amount I'll need for cash and take that (+ a credit card) on my trip. This will protect my real checking account from any undue hassles from losing the debit card associated with it. (which I'm not taking).

Thanks to this board, two years ago we did exactly what Travelnut is suggesting. It was a tussle though. Our bank insisted that it was not possible to get a "plain" debit card. Again, thanks to this board, we persisted.

We now take one "plain" ATM debit card and two credit cards. As soon as we get money from the ATM--a large amount--it's distributed amony our family members so no one person becomes a walking bank.

I hate to bring this up again, because some people will deny it is true since they haven't yet had this problem. But I've had increasing problems with my ATM only card, and after this past summer's nearly three months in Europe have switched it back to an ATM/debit card.

What is happening is that SOME banks are now letting Visa services handle all their foreign transactions including their ATM withdrawals if it is from a "foreign" bank. As a result if your card does not have a Visa (or presumably a Master Card) logo and is not also a debit card -- it simply will not work in those machines. So far, I was always able to find another ATM near by from another bank where it will work, but I suspect it will become an increasing problem. The worst problem with this was in Belgium where I couldn't find any machine (out of dozens tried) that will accept an ATM only card. A bank officer in Brussels informed me that "all Belgium banks" are using Visa services and ATM only cards will no longer work in Belgium ATMs. While neither my partner's nor my ATM only card would work at dozens of attempts at ATMs, our traveling partners ATM/debit cards worked at those same machines every time.

For what it's worth, my other problems were in Italy at several different bank ATMs. So far I've had no problems in the UK, France, Germany, or Switzerland.

I remember when that happened to you, Patrick--it was just after I switched and just before we left for another trip to France! We decided that in the worst case scenario, we'd pay the exhorbitant credit card cash withdrawal. Our plain debit ATMs worked fine, though.

I can't speak for Belgium since we've never been, but I can tell you that in three trips to Italy, we've always had problems with ATMs even with the Visa style debit card. In Rome we started making bets on "how many ATMs would it take to withdraw $200." One day it took six different ATM matchine tries.

We had the same problem a few years ago. The ATM-only card worked only some of the time (even though the correct PLUS or Cirrus logo was on the back of the card), yet we had NO problem ever with the VISA debit cards.
Now, we carry 2 different VISA debit cards (different banks) and 2 different credit cards (both VISA and M/C). We split these cards up between us, and make mental note of which PIN goes with which card. With this approach, we are well-prepared for ATM glitches, card retention/destruction, loss or theft, etc. It is also possible to get cash inside a bank with plastic and passport. I've never tried this, however.

Quick, before I go to work...I read on one of these threads that you can take your card INTO the bank and get your money off your card via a teller. Have y'all tried this?

PLMN...

You can use a visa or mc debit card to walk into a bank branch with the visa or mc logo and request a cash advance. As it is clearing through the visa or mc system, on the bank's side it is a cash advance same as if a credit card is being used. However, on your side, it will be a withdrawal from your chequing account when it clears the system.

It is a very good thing to know; especially when you are travelling say domestically in the US. As you know, almost all banks now charge you $1.50 for using their ATM machines but they are not allowed to charge on a cash advance/cash withdrawal done with a debit card. I've done it a lot even with some cards I have had in the past with brokerage accounts. Schwab, for example, charges $1 (yes I know it's not a big deal but there is a principle involved) for withdrawals from an ATM plus you pay the $1.50 or whatever (although you don't pay in Europe) but if you walk into the bank and ask for a cash advance you don't get nicked for the $1 and you don't pay the $1.50...

But I am sure there are those who will say it is chump change and why worry about $2.50 and they're probably right. But I have my principles....

Incidentally, you can't do this with a plain vanilla ATM card which does not have the visa or mc logo on the front....an advantage of the debit card over the ATM card for sure.