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How to Avoid ATM Surcharges

The financial reform bill enacted some much needed reform in the banking industry, one of which was a crackdown on the overdraft fees banks charge. Overdraft fees were, and probably will continue to be, a multi-billion dollar revenue stream for banks and with these new regulations, it’s not surprising that the burden of earning that kind of money will fall on other fees. In Bankrate’s recent annual Checking Study [3], they discovered that ATM surcharges were one of the unlucky carriers.

ATM surcharges [4] have been on the rise, increasing nearly every year since 1998, and this year the surcharge will be, on average, $2.33. It’s an increase from $2.22. (this is the fee an ATM will charge you if you withdraw money with a card outside their network.

Remember, ATM fees rarely come by themselves, they prefer to travel in pairs. The fee that your bank will charge you, for using another ATM, will average $1.41 (from $1.32). So if you use a non-network ATM, expect the other bank to charge you $2.33 and for your bank to charge you $1.41. How do you avoid this?

Carry Alternatives

These days, there are very few places that don’t accept credit and debit cards. Having one means you always have access to purchasing power and will almost never be forced to use an out of network ATM. You can avoid ATM surcharges if you avoid using the ATM entirely!

Use a Bank that Refunds ATM Fees

Many smaller banks, and some large ones, refund ATM fees. They recognize that their network of ATMs is too small and they’re, in effect, expanding their network by refunding a certain number of fees each month for customers that meet requirements, like a minimum balance. The Consumerist had a list of banks that refund ATM fees [5] that dates back to 2008 so that’s a good starting point.

Check the Network

You will only be charged a fee if you leave the ATM network. For example, ING Direct’s Electric Orange checking accounts are surcharge-free if you use an ATM in the Allpoint network. If the ATM sports an Allpoint logo then you won’t be charged a fee for using it, even if the ATM warns you that there is a charge. (Allpoint states that “If the surcharge screen appears during your ATM transaction, press “yes” to accept the surcharge and proceed with your withdrawal. You will not be charged the surcharge or Allpoint will refund your money.”)

Use a Large Bank

The final solution to avoiding surcharges is to find a large bank with branches and ATMs everywhere. One of the reasons why we still use Bank of America is because their branches and ATMs are ubiquitous. I can’t go anywhere without being within spitting distance of a Bank of America branch and ATM, which is great for avoiding fees. Many of the large banks have large footprints like BoA and it’s great for avoiding fees.

With a little preparation you can avoid being dinged fees for being caught out of sorts and using a non-network ATM. The fees don’t seem like much, a couple bucks here and a couple bucks there, but is that really how you wanted to spend your hard earned money? Probably not.

(Photo: redspotted [6])