5 Ways to Avoid ATM Fees

Advance planning, online banks, and a little creativity can help you escape those pesky banking expenses.


According to Bankrate's 2010 Checking Study, ATM fees are on the rise and are expected to only get higher as banks look to find ways to increase profits. The average ATM fees jumped 5% from 2009, up to $2.33, but many banks are looking at ATM fees as high as $5.

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Whereas insufficient funds fees and other fees are most often triggered out of ignorance, ATM fees are completely transparent. You are never charged an ATM fee without being warned beforehand. That makes ATM fees completely avoidable. Let's take a look at some strategies for avoiding ATM fees.

Plan ahead. You'll only be charged a fee if you use an out of network ATM, so the easiest way to avoid these fees is to plan ahead and withdraw all the cash you need from your own bank's ATM. This, of course, is easier than it sounds because no one ever plans to use an out of network ATM. Try to keep a reasonable amount of cash on hand for your daily activities, remembering to refill your wallet or purse whenever you're near the bank.

Be creative. If you do need to use the ATM and don't know of an in-network ATM nearby, use a little creativity to turn your debit or credit card into a cash generator. If you're going out to dinner with friends, offer to pay with the credit card and take the cash. If you're near a grocery store, by something you need and ask for cash back. It's better to pay a dollar for a stick of gum than pay $3 as a fee and get nothing for your trouble.

Use a nationwide bank with a wide ATM network. You only pay an ATM fee when you use an ATM that is not affiliate with your bank or your bank's ATM network. The easiest way to avoid this is to open an account with a bank with a large footprint, like a Bank of America. The interest rates on your deposit accounts won't be as good as your local credit union but you get a better ATM network in return.

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Avoid banks that reimburse you for out-of-network ATMs. Banks will often change their policies and several are considering the removal of these reimbursement programs. Smaller banks often reimburse out-of-network ATM use because they know their ATM network is much smaller, but it will be the first thing to go when profits are in the spotlight.

Consider an online checking account. An online checking account, such as one linked to a high yield savings account, is a great way to get both higher interest rates and a wide network of ATMs. Since online banks don't have brick and mortar locations, they rely on these ATM networks as their own and are less likely to cancel reimbursement programs. You get the best of both worlds—higher interest rates on your savings and a checking account with a sizable network. The only downside is that depositing checks can be a pain, some require you to mail the checks in.

With a little planning and creativity, you can setup a system such that you won't care that bank's increase their ATM fees!

Jim Wang writes about personal finance at Bargaineering.com. When he's not tackling money issues, he's usually looking forward to his next vacation and writing about it at Wanderlust Journey.