Money 101: Avoid ATM fees

Photo: Business Wire.

Photo: Business Wire.

One of the biggest problems I encounter when I travel across the country is needing to get cash on demand. Unfortunately, using an automated teller machine is one of the biggest ripoffs for consumers. When there’s no ATM for my bank nearby, I end up burning money in usage fees that I could be using to buy things I might enjoy from my vacation.

There was a time before the 1990s that ATMs didn’t charge fees to withdraw cash. Over 20 years later and the ATM usage fee is now a foregone conclusion for the everyday consumer. Bank of America, BMO Harris, Chase, Citibank, and Fifth Third customers get charged a $2 usage fee for using an out-of-network ATM. That’s in addition to the fee charged by the bank that owns the ATM.

In the end, these fees add up to a big amount and it’s worth trying to do everything you can to avoid them.

Don’t use it

The first tip is the easiest to follow: Don’t use out-of-network ATMs. If you must have cash-on-demand, only use ATMs that are in-network—basically, ATMs owned by your bank.

You might think this is easy enough to follow, but I have known many people that never cared to consider how much they were really losing just for the convenience of pulling out cash when they wanted it. Don’t be that guy or girl. Be mindful that convenience has a price that adds up.

I do have a favorite way of getting cash-on-demand with my debit card without having to go to an ATM. There are no Bank of America or Chase ATMs when I visit my family in Honolulu. If I need cash, I go to the local Long’s Drugs (owned by CVS) or Safeway grocery store to get cash back.

Online-only banks

The second tip is: Consider moving to an online-only bank. There are several banks that have cut the cost of doing business by not having physical brick-and-mortar bank branches. Because of this, they can sink resources in marketing checking accounts that have no ATM fees.

Online-only banks that offer checking accounts with free ATM usage include Ally Bank and Capital One 360 (formerly ING Direct). Ally will allow you to go to any ATM nationwide and it won’t charge you a fee. In addition, it will reimburse you the fee charged by the ATM owner. Capital One 360 allows you to withdraw money without fees from an expanded network of ATMs in the Allpoint network, which runs ATMs for many banks across the nation.

There are banks like State Farm that will allow you to withdraw money from any ATM and it will reimburse any fees incurred if you have direct deposit. Without direct deposit, it will refund up to $10 in fees each statement cycle.

Several smaller banks and credit unions (like Credit Union 1 in Chicago) offer no-fee ATM usage, or offer a certain amount of free ATM withdrawals per statement cycle. Credit Union 1 currently offers four free ATM withdrawals per month for its Express and Express Plus checking account holders.

Plan ahead

The third tip is: Know before you go. If you’ve got to travel out of town (domestically) and you know you’ll be needing cash, check online to see if your bank has in-network ATMs located where you’re going. Do a quick Google or Yahoo! search for drug and grocery stores in the area that offer cash back for debit transactions.

Gerald Farinas

About Gerald Farinas

An Edgewater Beach resident, Gerry is managing editor and interim editor-in-chief of Chicago Phoenix. He is concurrently an Evanston-based social services professional and media consultant. For more info: www.geraldfarinas.com.