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YOU'RE OUT RUNNING some errands and need a few bucks for lunch money. Hit the closest ATM, right?
That could cost you the price of a fast-food hamburger or more if the nearby automated teller machine isn't operated by your bank. First, there's the surcharge the operating institution tacks on to your withdrawal. Then your bank will probably slap on a fee, which it splits with the party that owns the machine and the electronic network or "switch" that processed the transaction.
Add it all up, and your lunch on the run in New Orleans may end up costing an extra $1 to $4.50. Still hungry?
Every bank that operates ATMs in the local area surcharges noncustomers from $1 at a handful of machines run by suburban community banks to $3 at the big-bank ATMs in the French Quarter. And only a pair of local community banks don't charge their customers for using another bank's machine. The rest tack on an additional $1 to $1.50.
Multistate Banc One Corp., the parent company of Bank One Louisiana, set a potentially expensive precedent recently when it began charging its own customers for using the bank's cash dispensers, mini ATMs that don't accept deposits.
"It's a high price to pay for convenience," says Loyola professor Ron Christner, who teaches classes in personal finance. "Most people probably take out $100 or less, and they're paying a high percentage on the use of that money, considerably higher than they get in interest from the bank."
Banks and others that operate ATMs have reached even deeper into consumers' pockets later, according to a study conducted by the Government Accounting Office. The GAO estimates the average surcharge has tripled since the end of 1995, and the number of banks that impose surcharges has rocketed some 320% during the same period.
The cost of convenience
Bankers say ATM fees and surcharges are a small price to pay for 24-hour access cash--an expense no more consequential than tipping, according to First National Bank of Commerce President and CEO Ashton Ryan Jr.
"You don't even think twice about that, do you? Is that a rip-off?" Ryan asks. "What's more valuable...