Money

The Subtle Way Banks Are Ripping You Off

It's bad enough that you often have to pay money to take out your own money from ATMs, but a new report from Bankrate.com has more bad news for consumers. The average fee for an out-of-network ATM has risen again — for the tenth year in a row — to $4.57.

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There are, of course, ways to avoid paying the fee. A lot of retailers, including most grocery stores and gas stations, offer customers a free "cash back" option. Or you could go to an ATM affiliated with your bank. But the fact of the matter is, in-network ATMs aren't always within a reasonable distance, and fees can add up over time, hitting poor Americans especially hard.

Over the past five years, out-of-network ATM fees have increased 12.2 percent. In large part, that's likely due to an overall decline is the use of these services. Patrick Bolton, a professor at Columbia Business School, told USA Today that another factor contributing to the rising fees could also be favoritism, where banks waive the fee for "good clients," leaving it up to everyone else to compensate.

These memes sum up the frustration people feel about ATMs.

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A 2014 survey from the Mercator Advisory Group found that 73 percent of Americans "admit that they would do anything to avoid paying ATM surcharges (and certainly find ways to avoid surcharges)." That's not a particularly surprising revelation; more shocking is the fact that more than a quarter of survey respondents said they wouldn't try to avoid the fee. Yet it does raise a question about who is able to avoid the surcharge in the first place and who gets stuck with the bill.

Because many low-income Americans — approximately 17 million, according to Mother Jones — don't have bank accounts, there's virtually no way to avoid paying fees. If they rely on prepaid cards or payroll cards, there are no in-network ATMs available to avoid a fee, for example. And the extra time it takes to locate an ATM, in combination with the surcharge for out-of-network usage, takes a greatest financial toll on the poorest Americans.

"Those who are unbanked are four times as likely to pay fees to access their own money," Bhaskar Chakravorti, an economics scholar at Tufts University, told CNBC. "That's a significant difference. A lot of people have the idea that cash is a poor man's best friend. We feel that the poor are actually getting screwed across the board. They're definitely being hurt dealing with cash."

RELATED: Photos of People at the ATM Has Become a Meme