The ABCs of ATMs: Tips to Avoid the Fees from an Industry Insider
Mar 30 '00 (Updated Apr 22 '00)
Some people say it stands for Always Taking Money, but it's really an acronym for Automatic Teller Machine and the fees alone account for over $2 BILLION dollars a year in costs to the consumer. There are over 9 billion ATM transactions a year in the United States alone! Make no mistake about it, ATM use is a big business.
Why are there so many ATM machines?
Obviously, banks are making money off them, but what's in it for your local convenience store? Plenty! Studies conclude that 35-40% of the money you withdraw at an ATM will stay with that retailer. The figure rises to 70-80% in the case of nightclubs, and 95% for casinos. Additionally, if the machine only dispenses $20 bills, the store's sales increase by 8%. With over 60% of Americans utilizing ATMs, that's a lot of bread.
How are the fees assessed? What is "double dipping"?
There are two kinds of fees assessed around the use of ATMs: surcharges and "off-us" fees. The surcharge is simply when the machine's owner charges you to use their facility. An "off-us" fee is when your own bank charges you to use a "foreign" (ATM that does not belong to your bank) machine. You can actually pay twice for one cash withdrawal, the so-called "double-dip", if you're not vigilant.
Strategies to Avoid "off-us" Fees - Choose your Bank wisely
• Ask a lot of questions about fees
• Ask specifically about fees when using an ATM out of the bank's network of machines
• Consider using a credit union (most do not charge off-us fees)
• Consider using an Internet bank (most will reimburse a certain number of ATM fees per month)
Strategies to Avoid ATM surcharge Fees
• Grocery Store: Pay using a check and get some extra cash. Even if you're just stopping by for a gallon of milk, it's quick and it's free.
• Post Office: Most Post Offices now have debit machines right at the clerk, which you can use to pay, as well as take up to $50 more in cash out of your account.
• Choose your Bank Wisely: Try to establish your account at a bank that has their own wide network of ATMs. Confirm that there are no fees to use the ATMs within the bank's network. Stay within that network.
• Use a Teller: but make sure your bank will not charge you for that service either.
• Convenience Stores: There are some that do not have ATM fees when you get cash on their premises. Here in the Maryland/Delaware area there is a chain called Wawa (I have no idea where that name came from!) and they do not charge a fee to use their ATMs.
• Debit Card transactions: Sometimes you can get cash back when you use your debit card to pay. Ask the merchant. Confirm there is no fee.
• Be realistic: You may want to withdraw larger amounts of cash if you find yourself having to hit the ATM with great regularity. This could save time as well as money, if you can control your spending!
• Credit Unions: Many credit unions do not charge ATM fees. That's great, but sometimes the bank where the machine is located does, so check it out carefully.
• Travelers Checks: you can use them even if you're not traveling.
ATMs are aligning with Visa and MasterCard
The giants just keep getting bigger. Naturally, if there's money to be made in plastic, Visa and MasterCard will be there! You'll notice that many ATM cards are now branded with either the MasterCard or Visa logo. The Visa Global ATM network has 531,000 locations, where as the MasterCard Cirrus network has 465,000 machines around the world.
Do NOT, repeat DO NOT, use your credit card to get cash!
Most credit card companies charge you a transaction fee to obtain cash. The fee is usually 2-3% of the total cash withdrawal with a minimum charge of $5-$10. You will also pay finance charges from the date you withdraw the money at a rate of interest that is normally significantly higher than your regular APR on the card. On top of that, you may be charged an ATM fee by the bank that owns the machine. Forget double dipping, this is a whole sundae! Don't do it!
Get to know where the good machines are
Here are some resources to help you locate surcharge free ATMs:
• ATMs in New England only:
http://www.surcharge-free-atm.com/
• ATMs elsewhere in the US:
http://www.surcharge-free-atm.com/surchargefree.html
• SUM participating Financial Institutions (no fees)
http://www.sum-atm.com/
• Free ATMs
http://www.freeatms.com/
• The Co-op Network Locator
http://www.theco-op.org/atm.html
• Intercept Surcharge Free Network (mostly the southeastern US)
http://intercept.know-where.com/intercept/
Check with the Giants (Not fee free):
If you're traveling outside the country, know before you go:
• Cirrus Network (MasterCard) 1-800-4-CIRRUS
http://www.mastercard.com/atm/
• Plus Network (Visa) 1-800-VISA-911
http://www.visa.com/pd/atm/main.html
By frequenting fee free machines and avoiding machines and banks that charge for ATM use, we can wield our power as consumers in the most effective way against ATM fees. Banks make enough money without imposing surcharges and fees on ATM use, trust me. :)
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Member: Kat
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