ATMs are convenient, and you pay for the convenience every time you withdraw money. Some ATM fees can be as much as $2 or $3. If you end up going to an ATM not operated by your bank, your own bank might even add fees on top of what the other bank is charging. In the end, you could end up paying as much as $6 (or more) just for getting access to your own $20. That’s more than 25% of what you’re getting out. Yikes.
Attempts at limiting ATM fees charged are being blocked, along with attempts to cap interest rates on credit cards and limit some of the predatory practices of payday lenders. As financial reform efforts make their way through the Senate, big banks and Wall Street firms are strenuously objecting to measures designed to protect consumers.
Whether you think it’s government’s job to help protect consumers, or whether you think that anything goes in the name of profit, if you are a bank customer, you have no choice but to be savvy. Make sure you understand your bank’s fee policy when it comes to ATM withdrawal. Some banks will waive the fees they charge (but you’ll still get hit when you use another bank’s ATM). Senator Tom Harkin (D-Iowa) claims that ATM transactions, on average, only cost the bank 37 cents. So you can imagine how much money they make off you when you are paying a $3 fee to get your own money. Be smart and try to avoid paying banks for the privilege of withdrawing money they’ve been lending out to get a return on anyway.
Look for banks that have lower fees, or waive their own fees. Find out if there is a network that can be used when you travel across the country (Credit Unions often have these networks that significantly reduce the fees you pay on ATM transactions). I’ve started getting cash back when I make the few deposits that come in check form. I also get cash back at the store when I use my debit card, allowing me to withdraw cash without the fees.
In the end, the only person that is going to look after your financial best interest is you.