How to Avoid ATM Surcharges
Lori Z. Bahnmueller
Michigan Credit Union League - Your Money Matters
ATMs sure are convenient. You find them all over town, sometimes even at convenience stores. You can withdraw money, deposit money, pay bills and you can do it seven days a week, 24 hours a day. Neat, huh?
For years now, people have been using ATMs more and more. In fact, ATM usage has never been higher. That's when surcharges began. A surcharge is a fee for using a specific machine in addition to whatever fee your own financial institution may charge you. Surcharges have ranged from less than a dollar to as high as five dollars.
ATM surcharges arrived in Michigan last October and have spread rapidly since then. Even the second largest bank in Michigan, which had proudly proclaimed last Fall that it wouldn't impose ATM surcharges, has since quietly done so. Surcharges have certainly stripped some of the fun out of using those convenient ATM machines.
But are you doomed to pay those surcharging fees? Not at all. With a little care and planning, you can avoid most -- and maybe all -- ATM surcharges.
First of all, get a list of non-surcharging ATMs. The Michigan Credit Union League is developing a statewide directory which should be published soon but many credit unions and small banks will have lists available for their own areas. As a general rule, look for ATMs owned by credit unions or small banks. 99% of Michigan credit unions have refused to impose an ATM surcharge and many small banks are doing likewise.
Unless you travel a lot, you don't need to know how to find a hundred non-surcharging ATMs. Just find a few near where you live, near where you work and on your normal travel routes.
Having the list of non-charging ATMs is a good start, but a few more tips may prove helpful. For instance, only cash withdrawals are currently being surcharged. If you need to make a deposit or transfer, it doesn't matter which ATM you choose.
Other ways to use ATMs economically include:
? Take advantage of "free" transactions through local merchants - especially grocery stores - that allow you to "withdraw" funds over your purchase price when you make a purchase with your ATM card.
? Plan your withdrawals more carefully - making fewer transactions for larger amounts. I used to take out $60 or $80 several times a month. Now I take $200-$300 once a month.
? Conserve your available cash by using checks or debit cards whenever possible. You can use charge cards too but be careful of running up high balances on your charge cards that you will have a hard time paying off when the bill arrives.
? Examine your receipts and statements carefully. Surcharges on withdrawals may be easily overlooked. Surcharges aren't large but if you forget to enter two or three $1.50 charges each month, you checkbook will soon be out of balance.
Are more surcharges inevitable? The trend toward surcharges and access fees is definitely on the rise. Some banks have even begun to surcharge their own customers for ATM use. But judging by the heated debate within Congress and many state legislatures, the surcharge issue is meeting some significant opposition. According to the U.S. Public Interest Research Group, about a dozen states - including New York, New Jersey, Massachusetts, and California - are already considering a ban on surcharges imposed by the banks that own the ATMs.
Senator Alphonse D'Amato, a Republican from New York, has introduced a similar bill in Congress. As Chairman of the Senate Banking Committee, D'Amato sees surcharging as anti-competitive because it favors the largest banks with the most ATMs. Banks, on the other hand, argue that these "double" fees are necessary to pay for the $40,000 ATM machines, making possible their placement in more remote locations.
It will probably be some time before the smoke clears and these critical issues are resolved. However, one thing is certain. The consumer who is careful, pays attention and plans ahead will avoid most of those pesky ATM charges.