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.