Keep More of Your Money by Avoiding ATM Surcharges

Question

“I don’t have easy access to the bank and end up relying on ATMs a lot to get cash. I’m tired of paying their fees! What can I do to keep more of my money?” – Carmine from Santa Cruz, CA

Answer

You’re right to be concerned about these charges. A recent report from the Government Accountability Office (GAO) revealed that ATM surcharges have grown by 20 percent over the last five years, with the average transaction fee reaching $2.10 in 2012. These fees ranged from 45 cents to $5 per transaction – including fees you pay to your bank and another bank that may manage the ATM.

If you make one visit to the ATM per week, you could accumulate up to a few hundred dollars in charges each year.  Consider the following strategies as you look to avoid or cut back on ATM surcharges:

• Get to know your bank’s ATM rules. Most banks allow you to use their own ATMs for free, but charge you a fee for withdrawing money from those owned by other banks. Some banks, however, allow you to use any ATM within the United States at no cost. Do your research and if you’re looking to open up an account for the first time, factor ATM surcharges into your decision.
• Pay with your debit card. You can now pay for most products and services using your debit card, eliminating the need to withdraw cash in the first place. Using a debit card (rather than a credit card) also helps ensure you spend within your means since you cannot spend more money than you currently have in the bank.
• Request cash back at retailers. When you pay with a debit card at a retailer, most PIN pads allow you to request cash back as part of the transaction. This method is fee-free and also saves you from having to visit the bank or ATM.
• Reduce ATM visits by withdrawing more money at a time. If you have to use an ATM and can’t avoid paying fees, try withdrawing more money at one time (thereby reducing the number of visits you have to make). It’s important to only do this, however, if you know you can spend responsibly and not blow it all in a short period of time.
• Plan ahead. ATM fees are often higher in places with low competition like airports, amusement parks and bars – get your cash in advance to avoid paying these more expensive charges.

Read more about ATM surcharges in the GAO report.