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How to Avoid ATM Fees

When my sister was in college, she used the ATM a lot. Whenever she needed some money, she’s go to the machine and pull out $20. Sometimes she’d check her balance. Then one day she realized, or my dad realized, that she was using an out of network ATM which charged around $5-7 (combined) each time she withdrew money. For every $20 she withdrew, she was paying a $7 fee. Every time she checked her balance, that’s another fee. Over the course of a semester, she racked up around $100 in unnecessary fees. In her case, she wasn’t aware it was happening but it’s a hard pill to swallow nonetheless.

Fortunately, with a few quick tips, being dinged by ATM fees is completely avoidable.

Never Use Out of Network ATMs

The easiest way to avoid ATM fees is to avoid out of network ATMs. One of there asons why I have a Bank of America account is because Bank of America ATMs are everywhere. They have coverage is nearly every geographic area and so finding a Bank of America ATM is usually not a problem. I do, in a sense, pay for this because I don’t earn any interest on the money I have in the checking account (there are never any “free” checking accounts).

There are also cases where banks join ATM networks to expand their own ATM coverage. Credit unions will usually do this because they know they have a small geographic footprint. For example, Tower Federal Credit Union, a credit union local to me, is part of the Co-op Network [3] (it’s a credit union-only network) and so Tower Federal customers can use Co-op Network ATMs without being concerned about fees.

Use Banks that Reimburse ATM Fees

A lot of smaller banks realize the competitive advantage they give up when they don’t have a large network, so they will offer to reimburse account holders up to a certain dollar amount each month on fees they pay when they use another bank’s ATM. For example, if you use Charles Schwab’s High Yield Investor Checking account [4], they will reimburse you for fees you pay. They try to automatically figure out what the fees are but they also have a mechanism by which you can notify them of a fee that they failed to reimburse. An unlimited reimbursement is rare though, usually banks will reimburse up to $10 in fees per month.

Utilize Cash Back

If your ATM card doubles as a debit card, you can always pop into your local store, buy something really cheap, and request cash back. Your transaction will come with a “fee” (the cheap thing you buy) but that will usually be far less than what you would’ve paid at an ATM. A pack of gum is always a good idea but other options include fruits, like a banana or apple. You will usually be limited to $20 or $40 in cash back so if you need more money, you’ll have to make multiple transactions.

Finally, the best advice on avoiding ATM fees is to avoid ATMs in general. Just make sure you carry enough cash or have other payment options (like that credit or debit card) to cover you in the event you are short on money.

(Photo: catatronic [5])