What Are ATM Fees and How Can You Avoid Them?

Automated Teller Machines (ATMs) offer a convenient way to access cash and manage banking transactions. However, using ATMs can sometimes come with additional charges, commonly known as ATM fees. These fees can accumulate over time if not carefully managed. Understanding these charges is a first step toward controlling banking costs.

Types of ATM Fees

A common charge is the surcharge fee, also known as an ATM owner fee. This fee is imposed by the ATM owner when a cardholder from a different financial institution uses their machine. The ATM screen usually displays this charge, which typically ranges from $3.15 to $3.19, allowing the user to accept or decline the transaction.

Another fee is the out-of-network fee, which is charged by your own bank for using an ATM that is not part of their designated network. This fee is separate from the ATM owner’s surcharge and averages around $1.58. When both types of fees are applied, the average total cost for a single out-of-network ATM withdrawal can reach approximately $4.77.

For international transactions, a foreign transaction fee applies. This charge is typically levied by your bank or card issuer when you withdraw cash from an ATM outside your home country. These fees are usually a percentage of the withdrawal amount, often ranging from 1% to 3%, and are incurred in addition to any local ATM operator fees.

Strategies to Avoid ATM Fees

Consistently use ATMs that are part of your bank’s network. Most banks provide tools like mobile apps or website locators to help customers find nearby fee-free ATMs.

Many financial institutions also participate in larger surcharge-free ATM networks. These networks, such as Allpoint or MoneyPass, offer access to tens of thousands of ATMs located in various retail establishments across the country. Checking if your bank is part of such a network can significantly expand your options for fee-free withdrawals.

Requesting cash back when making purchases at a point-of-sale terminal is an alternative to ATM withdrawals. Many grocery stores, pharmacies, and other retailers offer this service, allowing you to receive cash with your debit card purchase, often without an extra fee. While some retailers might charge a small fee, typically ranging from $0.50 to $3, and impose limits on the cash-back amount (often between $20 and $200), it generally remains a more cost-effective option than an out-of-network ATM.

Planning your cash needs in advance can also help reduce fees. Since ATM fees are typically charged per transaction rather than based on the amount withdrawn, taking out a larger sum less frequently can prevent multiple fee accruals. This approach helps consolidate your cash withdrawals.

Considering a different banking institution is a long-term strategy. Some online banks and credit unions offer accounts with no ATM fees or provide reimbursements for out-of-network ATM charges. These reimbursements can vary, with some institutions offering unlimited refunds, while others may cap the amount, for instance, at $10 or $20 per statement cycle.

Utilizing cash alternatives, such as digital payment platforms or relying more on debit and credit cards for purchases, can reduce your overall reliance on physical cash. This shift lessens the frequency of ATM visits, thereby lowering the chances of incurring fees.

Reviewing your current account type with your bank can uncover hidden benefits. Certain premium or higher-tier checking accounts often include perks like waived ATM fees or reimbursements for out-of-network transactions. While these accounts might require maintaining a specific minimum balance, the benefits can outweigh the requirements for frequent ATM users.