Sage Datko  |  December 7, 2020

Category: Fees

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Knowing how to avoid ATM fees can save you money.

Bank fees are on the rise and many consumers are looking for strategies to avoid ATM fees by opting to pay with debit cards as well as locating free ATMs.

What Are ATM Fees?

When you use an ATM, you may incur a range of fees. If an ATM is not owned by your bank, you may be charged a fee by both the ATM owner and your bank.

Unfortunately, these fees do not seem to be going away any time soon. Investopedia reports that ATM fees rose 36% between 2008 and 2018. In 2019, the average ATM fee hit a record high, rising to $4.72. This is a jump of more than 30% over the past decade.

According to a 2020 Bankrate survey, the national average for out-of-network ATM fees dropped in 2020 to the lowest amount in four years. Although the current average cost to use an out-of-network ATM has dropped to $4.64, the fees may still quickly add up for consumers who frequently withdraw cash. For people who withdraw cash once a week, these fees may end up costing them nearly $250 per year.

ATM fees may vary depending on where you live, with cities like Houston, Atlanta, and Detroit charging consumers the most to withdraw cash, and places such as Los Angeles, Seattle, and St. Louis charging the least.

Consumers have responded to this reality by finding alternative ways to withdraw cash or avoid ATMs altogether. Because of this shift, cash machine use has dipped as Americans discover how to avoid ATM fees.

The smaller number of consumers still using ATMs may also contribute to rising fees, as banks look to recoup the cost of operating ATMs with a smaller customer base from whom to assess fees.

How Much are ATM Fees?

If you are curious about how to avoid ATM fees, you may also be wondering what kind of financial toll they take on a customer. GoBankingRates.com explains that ATM fees typically range between $2 to $5. If you are charged multiple fees with every use, it can add up quickly. And if you withdraw cash frequently, the problem is magnified.

NerdWallet says that if you use an out-of-network ATM even just a couple of times each month, you could end up paying more than $100 per year in ATM fees between your bank and the ATM owners.

Knowing how to avoid ATM fees can save you money. What’s the Best Strategy for Avoiding ATM Fees?

As a savvy banking customer, it is important to know how to avoid ATM fees to save money. There are a range of strategies you can employ. Technology has made it increasingly easy not to need an ATM. Most retailers accept debit cards, credit cards, and digital methods of payment.

Paying with a debit card allows you to avoid using ATMs while still having easy access to your money. Mobile wallets like Samsung Pay or Apple Pay are other ways you can pay without using cash. Additionally, many consumers now use payment apps such as Venmo, Zelle, or Paypal in instances when they might formerly have used petty cash. Americans’ use of cash has been on the decline for several years, and the coronavirus pandemic has led to an uptick in paperless payment methods. 

You can also try getting cash back when making other purchases as a way to circumvent fees. Many retailers offer cash back at the point of sale, and this cash generally comes without any fees. Supermarkets, department stores, and convenience stores commonly offer this service. However, it is important to remember that most retailers limit the amount of money back at $100.

In some cases, online banks and other financial institutions may offer reimbursement for ATM fees. Check your bank’s policies to determine whether your financial institution offers this service. Some banks and credit unions require customers to submit a request for reimbursement, while others offer automatic reimbursement for ATM fees up to a certain amount per month. Alliant Credit Union, Ally Bank, Charles Schwab Bank, and Axos Bank all offer free ATM withdrawals or reimbursements for fees.

If you do need to use an ATM that charges a fee, try withdrawing a larger amount of cash and using it judiciously over a longer period of time, as opposed to making many smaller withdrawals. One withdrawal will hit you with just one or two fees (one from your bank and one from the ATM owner), whereas multiple withdrawals will result in multiple charges.

Some banks have been accused of failing to provide clear information about ATM fees or intentionally using misleading information to get customers to unknowingly incur fees. Some may be hidden fees, making it difficult to notice. Keeping a close eye on your bank’s terms and conditions is an important part of knowing how to avoid ATM fees. Additionally, paying attention to any pop-up warnings that appear on the ATM screen may alert you to the presence of unexpected fees.

Several victims of deceptive or hidden ATM fees have filed lawsuits against the financial institutions that charged the fees. According to plaintiffs in a 2016 lawsuit, several of the largest U.S. banks may have conspired to inflate ATM fees and prohibit smaller banks or credit unions from charging lower rates.

How Can I Find An ATM With No Fee?

If you use an ATM, you can identify fee-free ATMs. Usually, bank-owned ATMs will be free to its customers. Identifying where your bank has ATMs can help you avoid being charged a fee. Call your bank, use an ATM locator tool, check the back of your debit card, or simply conduct a Google search to get this information.

Consumers can download an ATM locator app to help find nearby fee-free ATMs. At least three apps are available for download or purchase that can point consumers to ATMs that don’t charge fees.

Some regional credit unions may have fewer ATMs. However, these institutions often have relationships with other credit unions that allow their customers to use other ATMs for free. If you bank with a local credit union but are traveling away from home, find out what other ATMs may be in your network at your destination.

In addition to offering reimbursements, online banks, as well as some other financial institutions, may offer free ATM access to a network of ATMs. Some banks offer a designated number of ATM fee reimbursements per statement cycle. GoBankingRates.com explains that Ally Bank provides up to $10 in ATM fee reimbursements per statement cycle, while online banking apps Chime and Simple don’t charge ATM fees, according to Due.com. These kinds of reimbursements offer flexibility if you cannot find an in-network ATM.

When comparing banks to credit unions, credit unions may be more likely to refund ATM fees. Since credit unions are member-owned, they may be more focused on providing a good customer experience than traditional for-profit big banks.

A way to avoid ATM fees is to keep more money in the bank. While some banks offer reimbursement on a per-cycle basis, others will only do so if you maintain a minimum balance. Often, customers who have high tier checking or savings accounts with a large balance will have their ATM fees waived. However, this may mean that ATM fees disproportionately affect those who are financially vulnerable.

Are ATM Fees Illegal?

ATM fees are not illegal. However, banks and credit unions may be violating banking laws if they fail to follow the regulations surrounding these fees.

In response to growing ATM usage, Congress in 1978 passed the Electronic Fund Transfer Act (EFTA). Under this federal law, consumers are allowed to challenge errors on electronic fund transfers, including ATM transactions, direct deposits, debit card transactions, point of sale transactions, and mobile transfers.

If consumers challenge an ATM fee error under EFTA, their bank or credit union is required to respond within 45 days. Should a financial institution fail to comply, consumers may be able to take legal action and recover damages.

Although ATM fees are not inherently illegal, consumers have sued their banks and credit unions for deceptive ATM fees.

In 2018, consumers hit Capital One with a class action lawsuit challenging the bank’s in-network and out of network ATM fees. According to the plaintiff, Capital One charges “unfair and unconscionable” ATM fees for balance inquiries – even when the transactions were made at an in-network ATM. When at an out of network ATM, Capital One allegedly doubles these fees.

Consumers say that the fees were never included in the bank’s contract. In fact, these agreements allegedly promise bank customers they will not be charged when using in-network ATMs. Contrary to these representations, the plaintiff says he was charged $2 to check his balance before he withdrew cash at an in-network ATM.

Join a Free ATM Fees Class Action Lawsuit Investigation

If you were charged ATM fees without notification when you used an ATM machine, you may qualify to join this ATM fees class action lawsuit investigation.

Attorneys are currently seeking consumers who were charged unexpected ATM fees by banks and/or credit unions in California to potentially serve as a plaintiff in a class action lawsuit. 

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6 thoughts onHow to Avoid ATM Fees in the US

  1. Marie Barbagallo says:

    add me

  2. Paula M Goudin says:

    add me

  3. CHRISTINE GOUDIN says:

    add me

  4. ROBERT J GOUDIN says:

    add me

  5. Joseph says:

    Please add me

  6. Mellisa Jones says:

    Would like to join. I’ve paid up to $8 for one withdrawal fee for withdrawal.

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