ATM and debit-card users face more fees

When it's time to make a payment or get cash, most people quickly reach for the plastic. At the same time, the costs associated with credit, debit, and ATM cards keep going up.

Americans are expected to pay $2.2 billion in ATM fees this year, up 18 percent from 1999, according to the website bankrate.com. The average surcharge to use an ATM not run by your own bank has hit an all-time high of $1.47.

Meantime, many debit-card users face a new fee for certain withdrawals. Five of the 10 banks that issue the most debit cards now charge some customers between 25 cents and $1.50 each time they use a personal identification number (PIN) during a transaction, says the June issue of Consumer Reports.

Behind the fees lies a battle between merchants and the credit-card and debit-card giants, Visa and MasterCard. On PIN transactions, stores pay 20 cents to the debit-card firms. But when a signature is used, the fee is 1.9 percent of the transaction. Not surprisingly, banks are steering consumers to use credit cards – which require signatures – by imposing the PIN fee on debit cards, credit-industry experts say.

Consumers Union, the magazine's parent organization, believes PIN transactions are more secure than those requiring just a signature.