Americans pay billions of dollars in ATM fees every year. When you use an ATM that belongs to a different bank other than your own, the law permits your bank to charge you a fee AND the ATM owner to charge you as well.
In 2006, the average surcharge assessed by ATM owners climbed again. Add in your bank's surcharge and $20 withdrawal to get some cash for a cab ride might cost you up to 20% extra in fees ($2 from your bank and $2 from the ATM owner).
This practice made enough people angry that some cities and states tried to ban ATM fees altogether. (I actually disagree with banning ATM fees, since they have given incentives for banks to create more and more ATMs all over the world, giving us easy, 24-hour access to our money.)
But then again, I don't pay ATM fees. Ever.
ATM fees are just one of many considerations when choosing a bank, but for many people, it is their primary consideration. For some reason, our instinct is to choose a bank near our home or work, so we can withdraw money without paying fees. While this is fine for some people, wouldn't it be better if every ATM was your bank's ATM?
Since I started college, I skipped opening an account with Bank of America (check out Bank of America's outrageous "ATM Denial Fee") and the other local banks around campus. Instead, I went with UmbrellaBank, an internet bank. Their policy on ATM fees: customers never pay them. Not only does the bank not charge any ATM fees, but they automatically reimburse you when you incur a fee from the ATM owner.
This is a very common feature of internet banking, and it allows you to never have to think about which ATM to withdraw from, since you never pay a fee to get your money. Even some "brick and mortar" banks with actual branches are offering promotions to reimburse your ATM fees.
Deciding between a "brick and mortar" bank and an internet bank can be tricky. I'll discuss the considerations in making this decision in a future post. But if you have a bank that charges ATM fees, get rid of them.
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1 comment:
This information is very persuasive. When it comes to fees, my bank -- Washington Mutual -- isn't as demonic as Bank of America, but I do get charged when using a none Washington Mutual ATM. So I wonder, what are the limitations of internet banking?
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