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How to Avoid ATM Fees

There’s something to be said for convenience, but it isn’t always cheap. Think twice about how often you run to the ATM.

There can be ATM fees that your bank assesses for using your own bank’s ATM, or using someone else’s ATM. There can be "foreign" ATM fees charged by the actual ATM machine you are using.

"Many consumers pay twice to use the ATM only once – the surcharges imposed by ATM owners and the fee your own bank charges for a ‘foreign’ transaction. Combined you could pay $4-$4.75 in some markets to use an ATM only once," says Ed Mierzwinski, federal Consumer Program Director for U.S. PIRG.

How fast can you say cha-ching? "ATM fees add up surprisingly fast," says Bijan Golkar, vice president and senior advisor at FPC Investment Advisory. "Convenience/surcharge fees, designed to take care of the actual ATM machine and pay for the servicing/maintenance start at around $2, foreign fees, which could also include currency conversions, can range from $1-$5, and you may even get charged just for checking your balance. This fee varies, but can run $1-$3."

A tiny number of banks may even charge a monthly fee, typically $1, simply to have a card and fancier, "rewards debit" cards may have higher monthly fees, says Mierzwinski.

In Bankrate.com’s 2013 Checking Survey, ATM fees hit an all-time high. According to the survey, banks charge noncustomers an average of $2.60 to use their ATMs, up from $2.50 in 2012. The average fee your own bank will charge you for going out of network was down a few percentage points from 2012, to $1.53, but combined you would pay more than $4 to make a withdrawal at an out-of-network ATM.

According to the survey, the fee that banks charge noncustomers to use their ATMs has risen by nearly a third since 2008.

"The good news is, there are some simple ways to limit ATM fees," says Golkar.

Here’s how.

Plan ahead

There’s no excuse for each week running to an ATM that’s not owned by your bank or part of its network. Get organized and if you’re budgeting properly you shouldn’t have to make "emergency" stops at ATMs.

Shop around

Many smaller banks and credit unions are forming "surcharge-free networks" that do not impose fees on other members. Some banks and credit unions also offer accounts that reimburse you for some or all of your monthly ATM fees, says Edgar Dworsky of ConsumerWorld.org. Others offer several free "foreign" transactions each month.

You can also avoid ATM fees by using Internet banks like Ally.com and some reward checking accounts like kasasa.com, which offers nationwide ATM fee refunds so you can use any ATM across the country and get reimbursed as part of your rewards.

Be strategic

One simple way to get access to cash and avoid ATM fees is to do a debit and get cash back, say like when you’re at the grocery store. Outsmart the foxes.

It also pays to think big picture. "Realize that most financial institutions, and particularly those with a high-touch service model, are looking for a ‘total relationship’," explains Charlie Crawford, president, CEO and chairman of the Private Bank of Buckhead.

Translation: the more business you do with the bank can pay off.

‘If a banker can work with a client on that total relationship, you’re more likely to get tailored service and enjoy perks like free ATM usage," says Crawford.

For example, many of his bank’s clients enjoy free checking, either as a courtesy because they have negotiated a total banking relationship with the institution, or because they have committed to using direct deposit.

"Ask your banker what fees he or she may already waive, how and why. For instance, we offer a no-fee ATM card to all of our clients. We do not charge ATM fees of our own and we refund the ATM fees clients may incur at other ATMs when accessing their accounts," says Crawford.

The bottom line – with a little effort you can make ATM fees someone else’s problem.

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QED   |     |   Comment #1
Interesting.  I've never paid an ATM fee in my life . . and I never would.  But I don't live in a city.  Is anyone else paying these fees?  Why?

Seems to me this is about knowing the network affiliation of your card, and then using ATMs on your network.  That information, for any network, is readily available here on the internet.  Anyway, that's what I do.  No fees yet!
Anonymous   |     |   Comment #2
There's really no reason to pay ATM fees in this era except in an emergency. I can go to any 7-11 convenience store and withdraw money from an ATM for free. I bank with credit unions that belong to the CO-OP Network.

Anonymous   |     |   Comment #11
I second the comment by Anon #2.
I bank with credit unions, and use their FREE CoOp ATM system all the time. One of my 2 Credit Unions is on the other side of the country. Doesn't matter. I can deposit, withdraw, etc., all for free at CoOp ATMs.
Credit Unions are the way to go.
Anonymous   |     |   Comment #3
If I need cash and I'm out of my service area, I just go to any grocery store buy a 50c chewing gum and withdraw a $100 cash free from any charges and if you need more money, you can repeat the above, no fees ever.
me1004   |     |   Comment #4
I note one pieces of wrong misinformation in this article, at least as applied to using "foreign" ATMs, where it says: "... designed to take care of the actual ATM machine and pay for the servicing/maintenance..."

In fact, the fees you might get charged by a "foreign" ATM have ZERO to do with that. By law, your bank must pay the "foreign" ATM 50¢ eventime you use it; and government regulators say it costs the "foreign" ATM only 25¢ to provide that service, including cost of maintenance and anything else. So any fee you might have to pay to a "foreign" ATM has nothing to do with maintanance, as your bank has alrady paid thart cost in full plus a 100% profit tothe "foreign" ATM.

ATMs were originally allowed and set upas free to use. Inf act,they were created to SAVE the bankmoney,nnot cost it anytiung, becuase eit is much cheaper for even your bank to have you use ATM machine than  for you to go to the window and withdraw cash from a person. How much outrage would there be if you had to pay a fee to goto the clerk window to deal with you account? Why is there not even more to go to an ATM, since in that case you actually are saving yoru bankmonney?

When ATMs were set up, regulators set the rules so that it would be a win for EVERYONE involved: the banks and the customers and the ATM owners. The rules set up a level playing field for all. Banks (or other ATM owners) were not allowed to charge the user anything for using it, because the ATM was paid by the user's bank, and at a very serious profit level too, but plenty less than it would cost your bank to have to provide a person for you to deal with instead. 

The ATM is still paid a very nice fee and profit by the user's bank, but thanks to Congress (never mind which party, although I suppose you could guess), the rules were changed to allow ATMs to charge users whatever they want. The political argument (or, as usual, actually the political lie) was that ATM owners should not have to allow users from other banks to use their machine at no compensation -- of course, that was a lie because they were not only compensated but at a level providing a high profit - -but few members of the public even knew that, so the lie was believable. And Congress lifted the ban on surcharges.

This ability to impose a surcharge on users was something the bigger banks wanted as a competitive matter to take accounts away from the smaller banks that might be paying higher interest. That was because a smaller bank doesn't have all the bank branches all over to provide the ATM locations, like a big bank does that has branches everywhere you go. With the new surcharge, a lot of users would find that if they didn't want to have to pay every time they wanted to withdraw their money, they would have to take their account to a big bank instead. The small banks would have no easy or straight forward way to compete.
So, the surcharge you pay has nothing to do with compensating the providing ATM for the service -- they are already very well compensated by your bank. It has to do with making a playing field that is NOT level, that is skewed against the smaller banks, and it has to do with finding that customers will pay the fee, so gouge the heck out of them, only the sky is the limit. And now, with the passage of years since Congress acted, no one even knows what the surcharges are about, customers actually think they are compensating for the cost they create -- no, not so, you are simply being gouged because they can gouge you. 

Yes, at first, some small banks did create a cooperative where you could use ATMs at another small bank's location in the coop. That seems to have at least mostly disappeared, although I don't know why. (Some banks now will pay their customers the cost of a surcharge for at least a certain number per month.) Meanwhile, the credit unions do have a very good coop that most credit unions are part of, and with that, you can use an ATM of one of the other credit unions at no charge, as well as many other ATMS (I often use one at 7 Eleven for free).  
pua   |     |   Comment #5
I have not used an ATM for at least 25 years.  I keep a few hundred dollars at home, which lasts a long time because I use credit cards for nearly all purchases.  When my cash stash gets low, I walk in to the bank and get a few hundred dollars from a human teller.  I get all $10 bills so as not to inconvenience the "little guys" I must pay in cash; and I make sure to carry a few $5s and $1s to be able to leave tips in the restaurant or pay $6 for my cash-only duplicate bridge game.
Anonymous   |     |   Comment #8
Ditto...use cash and credit card (paid off each month) and it limits my liability for fraud.
Anonymous   |     |   Comment #6
If you plan ahead, you can avoid all bank ATM fees. But, the banks count on the average ignorant American to be absent minded and buy stuff on impulse. For those people, there is no cure to avoid the ATM fees.
767   |     |   Comment #7
I use a Charles Schwab Bank ATM card for the rare times I need cash and am not near my primary bank location. Also great for international travel. All ATM fees are reimbursed and they do not charge a conversion fee when using it internationally. You get the bank interchange rate and don't get ripped off using an cash exchange place.
Elrod   |     |   Comment #12
ATM's....really? People still use those dinosaurs?
!!!   |     |   Comment #14
Yes, Elrod, people still use ATM cards. They are continue to be very useful.
New is not always better.
DOA   |     |   Comment #13
Regardless of the reason, if your debit card gets gobbled up by a Capial One Bank ATM machine and it is not a Capital One Bank Card, then Capital One Bank will not give it back to you even with a proper identification and even if you are a Capital One customer. They automatically destroy it and will not give it back to you.

Some banks have different policies though. As long as you have proper ID, they will give your card back to you.

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