ATM fees hit record high in 2023 — here's how to avoid them altogether

Despite the rise of digital payments, cash still has a place in society. Small restaurants, street vendors and other local businesses are sometimes cash-only or may not accept certain credit cards to avoid paying high swipe fees or charging their customers more to make up for them.

Whatever the reason, you may find yourself needing to withdraw cash from an ATM in a pinch. Depending on the ATM and your bank, you may be on the hook for pesky ATM fees, but there are ways to avoid these fees altogether.

• What are ATM fees?
• How much are ATM fees?
• Best ways to avoid ATM fees
• Bottom line

ATM fees are one of the most common banking fees you may encounter. ATM fees are charged for the convenience of withdrawing cash from a specific ATM, generally when the ATM operator does not belong to your bank's network. There are three common types of ATM fees:

• Bank's out-of-network ATM fee: This is the fee that your bank charges you when you use an ATM that is outside of its network.
• ATM operator fee: When you are using an ATM that is out of your bank network, this is the fee that the machine's operator will charge you to use it.
• Foreign transaction fee: When traveling outside of the U.S., your bank may charge a currency conversion or exchange fee for using international ATMs.

It's important to note that all these fees can stack on top of each other, creating a much larger fee than you may have initially anticipated.

ATM fees might seem insignificant at first, but they can add up quickly if you use ATMs multiple times a month. A Bankrate study found that the average ATM fee hit an all-time high in 2023 at $4.73. This total is made up of an average $3.15 surcharge that's levied by the ATM owner plus an average of $1.58 that's charged by one's bank for using an out-of-network ATM.

The 2023 average ATM fee is up seven cents compared to the year prior and 60 cents higher than what it was a decade ago, so this fee seems to only continue to climb. Luckily, if you're looking to withdraw cash, there are still ways you can skip any ATM fees that often tag along.

Use in-network ATMs

There are several ways for you to avoid ATM fees, with the most simple one being to only use ATMs within your bank's network. You can generally locate the nearest fee-free ATM using your bank's mobile app.

Online-only accounts often offer access to larger ATM networks than brick-and-mortar banks. For example, with a Chime® Checking Account, you'll have access to over 60,000 fee-free ATMs in the Chime network, more than the top three national banks combined. With more ATMs in your network, you'll have a better chance of finding one without fees or additional charges.

Choose an account that reimburses fees

Another option would be to bank with an institution that provides ATM fee reimbursements. When you have an account that offers ATM reimbursement, banks generally automatically credit your account at the end of each statement if you incurred any ATM fees. Some banks offer unlimited ATM fee reimbursements, while others cap it at a certain amount, generally between $10 to $20 per month.

For instance, if you have an Ally Bank Spending Account, Ally will also reimburse you up to $10 each statement period for any ATM fees you have incurred. The account also stands out for not charging any monthly maintenance or overdraft fees.

Get cash back

If you use a debit card or prepaid card to make purchases, requesting cash back at a store is another way to avoid ATM fees. Many stores, especially larger chains, will allow you to request cash back during checkout. For instance, if you buy a $5 box of cereal and ask for $20 in cash back, the store will charge you $25 and give you a $20 bill (or whatever size notes you requested). You'll just need to enter your personal identification number (PIN) in the payment terminal.

This can be a great way to solve two tasks at once if you're headed to a store anyway. Stores will generally not charge you a fee for this, but it's good to double-check just in case.

Try using a digital payment app

While an individual or smaller merchant may not accept credit cards, sometimes digital payment methods and peer-to-peer payment apps like Venmo, PayPal or Zelle are available. Zelle is an easy, free way to send money to people using just an email or phone number and is offered through over 2,000 banking apps. If physical cash isn't a requirement, digital payment methods can help you skip the ATM entirely and avoid any additional fees that come with it.

With ATM fees hitting a new high, it's more important than ever to try to avoid them. Choosing the right bank can help you get around any unwanted fees and taking advantage of digital payment apps can help cut down on your trips to the ATM.

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