Truth About ATM Fees

The convenience of withdrawing cash from an ATM has become second nature for millions of people. In fact, the convenience has become an expected service for many. A person might see several ATMs, some on the same block or within a few blocks radius, when walking down a busy city street; they are on street corners, in convenience stores, at gas stations, outside, as well as inside banks, and in bars and restaurants. As more and more establishments purchase and provide ATMs, consumers are finding that they are paying fees at machines that are not provided by their own bank.

Most often, when a cardholder uses their debit card to withdraw cash from an ATM, they are charged a convenience fee, if it is not a machine provided by their bank. The user may also find that their bank charges a fee, or it can also be looked at as a penalty, for using an out-of-network ATM. In some cases, banks will have a limit on how many cash withdrawls a user can make per month; if they exceed this limit, they will be charged another fee from their account for each transaction over the limit. This can be avoided by the cardholder planning ahead for cash withdrawls, such as, taking enough money for the entire week instead of hitting up the ATM twice in one week, or by using their debit card for in-store purchases, rather than using their cash.

When fees were first introduced at machines, they started out very low, approximately $1.00 to $1.25; however, today, many consumers are paying upwards of $2.50 or more.  As fees continue to rise, some users continue to complain even though everyone has a choice.

What consumers fail to understand, is that using the machine is their choice and fees are disclosed prior to withdrawing money. Using an ATM should not just be considered a convenience, but also a responsibility. It is the choice of the cardholder how and where they choose to use their card, and, in turn, their choice on whether they want to pay fees.

What is a convenience fee?

• A surcharge fee, also known as a convenience fee, is something that is charged by the ATM owner. The basis for this charge is simple, it is a fee for the use of the machine. This is a means for an owner to make operating the ATM a business and hopefully making a profit based on the investment and operation. An ATM owner might not see a profit for quite a few months if they have recently purchased and installed the machine. Depending on the type and placement of the ATM, Machines can cost anywhere from $2,000 to $50,000 or more; therefore, it could take quite some time for the owner to recuperate their cost of the machine. A surcharge or convenience fee is set at the owner’s discretion, but usually ranges from $1.50 to $4.00.
• When a cardholder withdraws cash at an ATM provided by their bank, they are not usually charged the convenience fee; but again, it is the discretion of the owner to set the parameters for the use of their machine.
• ATM Surcharge fee’s are also a fee to offset costs besides the equipment. There are maintenance fees, the cost of cash in the machine, paper for the printer, and processing costs for connecting the various ATM Networks.

 What is a foreign ATM fee?

• A foreign ATM fee is most often charged by a bank. This is a fee that the bank charges a cardholder for using a machine not provided by the bank, or also referred to as out-of-network ATM. Depending on your bank, fees can also vary anywhere from $1.50 to $4.00. Some Banks offer accounts where they reimburse fees so it’s best to ask your bank about the various fees if you are a frequent ATM user.  With that said, you can see how fees can add up if a user continuously makes the choice to use an out-of-network machine.
• It has been said that with the millions of out-of-network transactions that occur each day, that it only costs a bank pennies to process these transactions. A smart consumer might take the stance that their financial institution is profiting from them withdrawing their own money when using a machine not provided by the bank. However, due to the number of ATMs available, usage per ATM has significantly decreased making it more expensive to operate a bank ATM. Bank ATMs are especially expensive due to the multi-functionality.
• Simple solutions to excessive fees:
  • Only withdraw cash from a bank-provided ATM
  • Use your debit card for in-store purchases and save cash for the necessary moments
  • When using an ATM withdraw enough to prevent having to return to an ATM hours or days later.

We know ATM fees are inevitable in some cases, hence the term “convenience fee”, and at some point everyone is going to run into a moment that forces them to use an out-of-network machine; but most of the time we have a choice.

For consumers to continually moan and groan about fees, yet continue to return to the same machine time and time again, seems crazy. Let’s face, doing the same thing over and over again and expecting different results is the definition of insanity.  Let’s face it, it is the responsibility of the consumer to manage their money and they are the only one in control of the fees they do and do not want to incur.