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It seems silly to have to pay money to withdraw money from your own checking account. However, when you use an ATM from a bank that you do not belong to, you are doing just that. Last year alone, banks generated over $2.5 billion in ATM charges!

An ATM that is not owned by your bank is typically referred to as a 'foreign' ATM. Using a 'foreign' ATM will result in you paying two fees. One will be a charge from your bank as a result of them having to process a transaction from an ATM from another bank. The second charge is going to be from the bank that owns the ATM you are using. This is referred to as a surcharge and is imposed as a result of them having to process a transaction from a non-customer. As a result of the double charge, using a 'foreign' ATM can be expensive.

Consumers pay high ATM fees for convenience
Most banks will charge $1-$1.50 for using their ATM. However, you can expect to pay significantly higher fees when using an ATM in a major city or airports, hotels, clubs, sporting arenas or any other place where it is going to be difficult for you locate an ATM that is owned by your bank. Think about withdrawing $50 and having to pay $5 in fees. That is a 10% charge just to retrieve your hard earned money! Seems ridiculous, but the banks are getting away with it.

The cost banks face for processing ATM transactions is minimal. The fees they charge are merely a means of generating extra revenue. On the contrary, banks claim that the extra money they earn from these transactions allows them to install machines in areas that would not normally have them. Thus creating better customer convenience.

Avoid fees by planning ahead
When using a 'foreign' ATM you will be notified of any associated fees for use prior to withdrawing any money. You will be given the option of continuing or cancelling your transaction. It is doubtful that many people will decline the transaction at that point. Therefore it is vital that you are sure you have enough money for anticipated and unanticipated minor expenses.

Sometimes smaller banks or credit unions do not have ATMs. If this is the case, they will likely develop a relationship with a larger ATM network; allowing free use or reimbursement for any surcharges imposed. Typically, you will be allowed to make a set number of free transactions/month (usually ranging between 3-9). Contact your bank to find out what there policy is.

There are also a wide variety of fees associated with checking accounts.



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