BANKING Convenience of cards comes at a stiff price

A survey shows how fees accumulate with ATMs and debit and credit cards.
NEWSDAY
All those plastic cards you carry may be eating away at your wallet.
An array of costly and sometimes overlooked fees attached to ATM/debit cards, credit cards and even gift cards can nick consumers for hundreds of dollars a year, according to the latest New York Public Interest Research Group survey, released this week.
For instance, a consumer carrying one ATM debit card and two credit cards, each with a $1,000 balance, could lose $375 a year to interest and fees on the credit cards, if he or she only paid the monthly minimum. Someone holding three gift cards and a prepaid card (cards pre-loaded with a certain dollar amount) could fork over $318 in fees.
Among the group's findings in its statewide report:
Some 94 percent of bank-owned ATMs surveyed assess nonaccount holders an ATM surcharge, with an average of $1.55. This is down slightly from last year, mainly because Washington Mutual eliminated its ATM surcharges last fall. Some 92 percent of banks charge a foreign ATM fee for using another institution's machine, the average being $1.28.
All private, nonbank ATMs access a surcharge fee; the average is $1.55.
Some 89 percent of banks surveyed assess a debit card fee for PIN-based transactions, with an average charge of 70 cents. There are no fees for signature-based purchases with a debit card.
Steepest fees
Prepaid cards, also called stored value cards, can carry the steepest fees, including an average activation charge of $50, annual fee of $70, point-of-sale transaction fees of 86 cents, ATM transaction fees of $1.64 and fees for adding new money of $1.44.
Payroll cards, an increasingly popular way for companies to pay employees, can carry a host of fees, including monthly charges, ATM transaction fees and point-of-sale fees.
Gift cards issued by credit card companies may start losing value if not used within a certain period. For instance, several deduct $2.50 a month if not used within six months.
"Because the fees are $1 here, $1.50 there ... many consumers do not realize just how quickly those dollars can become hundreds of dollars," said Aisha Fraites, NYPIRG project coordinator at New York College of Technology.
There are ways to avoid these fees, said John Hall, an American Bankers Association spokesman. For instance, many banks waive fees if consumers sign up for certain accounts, directly deposit paychecks or maintain a minimum balance. Also, people can avoid ATM fees if they use their own bank.
But that puts the burden on consumers, when it should be on banks, card issuers and regulators, said Tracy Shelton, a NYPIRG staff attorney. The group is urging state and federal regulators to enhance disclosure of credit card interest charges and ATM fees, and outlaw expiration dates and dormancy fees for retail gift cards.