The substantial increase in the number of ATMs over the last quarter of a century has created a situation where you are never usually far away from a bank, shopping center, gas station or some other convenient location where you can easily withdraw cash from your bank account; whatever the time of day or night you can take out the money you need for your transactions. It is hard to know how many billions of hours bank customers save each year by withdrawing cash from a convenient ATM. Certainly these savings must be significant in contrast with the time they would have to spend if they were only able to go and use an ATM in their nearest bank branch, or perhaps even have to wait in line for a bank teller, not to mention having to adjust their schedules to fit into restricted banking hours.
While ATMs seem to have sprung up like mushrooms after the rain, everyone recognizes that there is no mystery but rather obvious commercial interests behind their multiplication. The ATM network operators have both recognized the potential demand for this service and contributed to increasing the demand by placing ATMs in many new locations. While the provision of so many ATMs can certainly be regarded as a public service, operating ATMs is also very profitable. It is estimated that banks earn well over two billion dollars a year in income generated from ATM fees.
Twenty and more years ago ATM operators rarely charged for use of their machines, though admittedly they were far fewer than there are today. From the banks’ perspective ATM fees can be justified since they help finance the costs and placing and administrating ATMs at remote locations, but customers frequently feel that they are effectively being charged for withdrawing their own money.
Understanding ATM Charges
ATM users may be subject to two types of charges. Their own banks may have a surcharge on ATM usage. Sometimes this surcharge is waived up to a certain number of transactions, and if a minimum account balance is maintained. Usually banks do not charge for use of ATMs in their ownership, or for use of ATMs belonging to an operating network with which they have an agreement.
If you use the ATM belonging to another bank or an operating network without an agreement with your bank, it is normal to pay what is termed an interchange fee. This may be charged in addition to the surcharge levied by your own bank.
ATM fees are certainly not hidden from the customer since they are displayed on the screen before you make the transaction, though few customers are going to decide to forgo withdrawing the cash they need to save the ATM fee. Usually ATM charges are in the $1.5 to $6 range and so they don’t seem to bite too deeply into the pocket, but if you have to pay both a surcharge and an interchange fee it can come to over $10. Frequent ATM users may run up substantial fee bills in the course of a year. If you regularly withdraw amounts under $100 you can end up paying at least ten percent of the value of the cash taken out in ATM fees and an even higher percentage for smaller withdrawals and this is obviously a situation most people would wish to avoid.
ATM Charge Avoidance Strategies
Some bank customers may be content to accept ATM fees as a reasonable price to pay for the convenience of this service, but if you are keen to reduce the contribution of ATM usage to your banking costs there are a number of strategies you can follow:
Only use ATMs owned by your bank or operated by an associated network
Depending upon the terms of your account you can avoid paying ATM surcharges to your bank, or at least avoid the additional interchange fees, by only using your bank’s own ATMs or ATMs of an associated operator network.
Open an account with a bank that does not charge for ATM usage
There is an increasing trend for banks to offer refunds of ATM fees up to a certain amount. Smaller banks find that forgoing these fees can be an effective way of competing with the pull of the large banks and their extensive ATM networks.
Internet banks are well-known for offering their customers ATM refunds but there are also a number of traditional banks that have realized that this is a way of attracting customers. For example, the Bank of Internet offers free ATM card withdrawals and reimburses ATMs charges up to a maximum of $8 per month, and the Metropolitan National Bank of Arkansas offers unlimited 24-hour use of all its ATM locations with no transaction fees.
Avoid making many small ATM transactions
Get out of the habit of making many small withdrawals from ATMs. By withdrawing a more substantial amount of cash to cover anticipated needs for a longer period you can start saving on ATM charges.
Get cash by using your debit card
Banks often offer a debit card that can also be used as an ATM card. You can use this card to buy something at a store and in addition to any change due to you on the purchase you have the right to take out additional cash from your account and these withdrawals are free of charge.