As regulations clamp down on other sources of income, banks are raising ATM fees and handing out fewer free checking accounts as a result.

According to bankrate.com, banks are hiking ATM fees to record levels.

The financial research firm announced on Monday that ATM surcharges rose for the eighth straight year, up 4%, to a record high of $2.50. And the fee for using a competitor's ATM rose 11% to $1.57. So for many customers, using an ATM from a competing bank costs $4.07, an increase of 7% and a new record.

Traditionally banks provide free ATM usage for free to their own customers. In return, banks charge consumers who are not within their network to use their ATM's.

However, according to Bankrate.com's senior financial analyst Greg Mcbride, people are getting smarter about using only in-network ATMs, which means that the companies are trying to make up for that lost revenue.

Bankrate.com also found that 39% of non-interest checking accounts provided by U.S. banks are free of charge to all customers. That's compared to 45% last year and a peak of 76% in 2009.

McBride says that the banking industry has lost income due to an increase in regulations, and that's made free checking accounts harder to find.

According to money.cnn.com McBride goes on to say "Two regulatory changes in particular have cut the legs out from free checking, "one putting restrictions on overdraft charges, and the other limiting swipe fees when a consumer uses a debit card."

The swipe fees that retailers pay every time a customer uses a debit card were reduced last year, said McBride. This followed regulations imposed in 2010 that placed limits on overdraft fees.

Swipe fees and overdraft fees had "helped underwrite the costs of free checking" before the regulations were imposed, said McBride. Now, the bank industry is more selective with free checking accounts, usually providing them only to preferred customers, such as those with direct deposit accounts.

The annual report found that 72% of customers would consider switching accounts if their fees were raised -- up from 64% last year. This information shows that these types of cutbacks are affecting customer behavior.

The report said that "higher-income" customers, with at least $75,000 in their accounts, were most likely to switch, with 82% saying they would consider changing banks if fees were raised.

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