Controlling ATM Fees

ATM Machine

ATM Fees have been in the news lately and the Blogosphere (at least the PF one) has been reacting. The Bank of America has raised their ATM fees to $3 which I have to agree is a bit on the excessive side. So why is the reaction so negative? Well first off I think that the other banks out there will follow suit on this and they’ll all be charging this amount soon.

Why is this such a big deal?

Well if you’re like me you look at your bank statement and notice all of the little dings associated with bank fees and ATM fees. It’s one of those hidden costs that no one really thinks about when they’re taking money out of the bank machine. When we step up to an ATM and pull money out it’s because we need it then and there now rather than using another form of paying for our purchases (debit or credit).

How do we control ATM fees?

Very simply either use credit cards, wisely, which can be problematic in it’s own right or we need to learn to control these fees. The simplest way to control them is to carry cash around with you. If you take out some cash when you’re at your bank you can reduce your reliance on other bank’s ATMs. If you know you’re going to need money take some out rather than scramble last minute to find an ATM only to realize later you just paid $3 to take out $20!

Saving money with Cash

I’m sure that there will be people out there that disagree with me when it comes to relying on cash but it can save you some money. If you can reduce the ATM fees that appear on your statements by say 10 ATM fees per month you’ve just saved $15-30 depending on the bank you use. As with most small amounts you can easily neglect this money but if you take it over the longer term it all of a sudden makes a considerable difference. That $15/mo over the course of a year translates to $180 and at $30/mo its $360. Where you might ignore $15 or $30 as a convenience fee the $180 to $360 all of a sudden doesn’t seem that small. By controlling your ATM use you can reduce your debt. If you happen to use an ATM a significant amount this can save you a lot of money.

Carrying cash around brings with it it’s own problems in that people no longer feel safe having $200 in their wallet. Chances are you don’t need quite that much and if you do need the money carry one credit card for the larger purchases. Both cash and credit cards require some self control to ensure you don’t overspend but they’re a much better than paying the banks an excessive fee for a convenience.

I’ve always seen ATM fees as excessive, even at $1 per use I think is a bit much since by volume of use alone the banks are profiting at less than this per transaction. Banks make money hand over fist yet they insist they need to increase fees on basic services. The worst part of this whole equation is the fact that this is going to impact everyone especially people for whom $3 can make a difference when it comes to basic expenses such as food and shelter.

5 thoughts on “Controlling ATM Fees”

  1. I always think of it in terms of percentage. If you take out $20, and have to pay $3 from Bank of America to use their ATM, and $1 from your bank to use the out of bank ATM, you are paying 20% of the $20 in fees. So imagine if you are spending it on a restaurant meal, on which you pay a sales/hospitality tax of 10% and then a tip of 20%…

  2. Well, rather than carrying around credit cards and cash, you can always use a debit card. Then you can still make the larger purchases (that you can afford) and you don’t have the temptation of the credit card.

    I think the fee increase is pretty annoying, but a lot of banks still offer free ATM fees as an incentive. I think either Compass Bank or Capital One here in Texas offer that.

  3. If you need cash, just use your banks ATM instead of using other banks ATMs. If you are at a bank that doesn’t have alot, switch banks.

    I agree with Shelby, just use a debit card. There are very few places that don’t take them now.

  4. I don’t have the outrage to the fee increases. I mean after all the banks built out the ATM network and they’re only charging non customers. It’s not like using ATM is constitutional right. 30 years (in my diapers) ago I couldn’t even go into another bank and withdraw money.

  5. The problem with using credit cards is that they carry another hidden fee – the interchange fee that’s charged to merchants when consumers swipe. Mirroring ATM fee increases, the interchange fee has increased 117 percent since 2001 and there’s no stopping the duopoly that is MasterCard and VISA. Now even those who use cash are affected by the increase in the cost of products.

    Is it too much to asks to make all these fees cost-based? Or at least require companies to disclose the hidden fees like they do ATM fees? In the spirit of disclosure, I work closely with the merchants on unfair credit card fees and we hate credit card companies just as much as consumers.

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