You’ve likely experienced the double whammy before. You’re on vacation or hanging out with friends and need quick cash, so you run to the nearest ATM. Right before you confirm your withdrawal, the screen notifies you of its sinister plan to charge you a fee. Since this particular ATM is not in your bank’s network, you know you’re also going to get hit with a second fee from your bank. At this point, you may or may not know you have a choice. Well we’re here to say that you do. With the following knowledge of ATM fees and how to avoid them, you’ll be equipped to make getting cash a better experience.
A Little History about ATM Fees
Before 1996, customers using out-of-network ATMs were charged a “foreign” fee by their bank but weren’t expected to pony up to the institution that owned the ATM as well. Once banks began adding a “surcharge” fee to non-customers using their machines, the mass double dipping began. In 1998, the total cost of using an out-of-network ATM averaged about $2.00. In 2013, that average cost reached a new high at $4.13.
Even though consumers are more frustrated with ATM fees than any other banking fee, the banks show no sign of letting up. Bank of America, SunTrust and Citibank recently hiked their foreign fees from $2 to $2.50, and Chase even tested a $5 surcharge back in 2011. The bottom line is that banks will do anything, even something as silly as charging you to retrieve your own money, to increase revenue.
The Federal Reserve, the U.S. Treasury, and the FDIC recently announced a proposal to require banks to report ATM fees to allow for better transparency and improved consumer protection. Hopefully this will be a good step toward abolishing the nasty things once and for all.
Until that happens, though, knowing your options can help you embrace the right mindset of protecting your money.
Check Your Bank’s App
Your bank likely has a mobile app with a branch/ATM locator feature. If you’re in a new area and need cash quickly, it should take you all but 30 seconds to check and see if there are any in-network ATMs nearby.
Use the Cash Back Technique
Instead of getting hit with two fees at that gas station ATM, buy yourself a little treat and ask for cash back. That drops your “fee” down to less than a buck. An even better way to work this tip is to ask for cash back during your regular grocery run, whether you need it right then or not. Chances are you’ll need it at some point and you’ll be glad you thought ahead.
Use an Affiliated Network
Some smaller banks and online banks partner with ATM networks like STAR and Allpoint, which give customers a much larger network to choose from. Additionally, some credit unions partner with an ATM network that allows customers of partner credit unions to withdraw cash without a surcharge. Capital One 360 is my online bank and they use Allpoint, so I have my choice of 38,000 ATMs across the country. Kinda nice 🙂
Switch to a Better Bank
By now you probably have a plan to use all of these rock star tips, but might we suggest just one more that could rid yourself of the need to do anything extra altogether? If you’d rather not go through the effort of running around to find a free ATM or planning ahead, you can always switch to a bank that doesn’t charge fees in the first place and will even refund your ATM fees.
Become Part of the Solution
One company, fittingly called Free ATM, has devised a compelling solution to the problem. Instead of charging fees, the ATM would show customers a 15- to 20-second targeted ad. The company recently launched a crowdfunding campaign to wrap up enough funding to establish itself in New York City. As a potential investor in the company, you become a potential investor in a long-term solution.
Though ATM fees may seem small and insignificant, they add up. No one should have to pay to access their own money. With these tips, you can fight back and keep the money that is rightfully yours. Go forth and save!
What are your favorite ways of sticking it to the banks with ATM fees? Have you been hit with the ATM double whammy?