Why You Shouldn't Be Paying an ATM Fee

Nobody's paying ATM fees anymore—and neither should you. Here's how to avoid them.

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In Atlanta, it typically costs more to withdraw cash from an ATM than it does to buy a venti pumpkin spice latte at Starbucks. At $5.60, Atlanta has the highest average ATM fees in the nation, according to data compiled by Bankrate.com, a site known for its interest rate comparison tools and personal finance calculators. Across the board, the average ATM withdrawal in the U.S. totals $4.64 for two fees—one from the ATM owner and the other from your bank when using out-of-network machines. Instead of sacrificing that fancy coffee, skip the ATM fees—there's just no reason to pay them anymore.

More than a third of all checking accounts now include at least one fee-free withdrawal a week, meaning fewer people are paying ATM fees overall, says Greg McBride, senior vice president and chief financial analyst for Bankrate.com. Meanwhile, ATM networks have grown, cash usage has shrunk, and people are making fewer ATM withdrawals than they used to, he adds.

Even when people do pull out cash, their withdrawals tend to be smaller—making ATM fees look even larger. "Five dollars on a $30 withdrawal feels different than $5 on a $100 withdrawal," McBride explains.

One way to avoid ATM fees is to exclusively use ATMs in your bank's network. Another is to look for financial institutions that waive their fees regardless of where a customer makes a withdrawal. Some even reimburse customers for fees charged by external ATM owners, though dollar or transaction limits may apply.

Eliminating even the cheapest average ATM fees in the nation—$4.11 in Chicago, according to Bankrate—is enough to splurge on a tall cinnamon dolce latte to sip while strolling along Lake Michigan.

Consider these banks instead.

Axos and Lending Club are two online banks that don't charge fees on domestic ATM withdrawals. Both also reimburse fees from external ATM owners, though limits apply on some types of accounts. As long as your account qualifies, just withdraw the cash you need and, at the end of the month, look for a statement credit equal to the ATM fees you've been charged.

Citibank isn't as generous and won't reimburse you for fees charged by external ATM owners, but it does offer fee-free access to a network of more than 65,000 Citibank-branded ATMs, many conveniently located inside popular retailers like Target, Costco, CVS Pharmacy, Walgreens, and Rite-Aid.

Check out credit unions.

USAA Federal Savings Bank is a San Antonio-based credit union serving military families. It offers service members, veterans, and their families up to 10 free withdrawals per month from a network of more than 60,000 ATMs. USAA also reimburses customers for up to $15 a month in fees charged by external ATM members.

If you're a civilian, consider Alliant Credit Union. It offers no-fee access to more than 80,000 ATMs across the U.S. and reimburses customers up to $20 a month in external ATM fees. Anyone can join this Chicago-based credit union by making a donation to the Foster Care to Success charity.

Ask for cash back.

If changing banks isn't an option, consider swiping your debit card instead of stopping at an ATM. Many businesses allow customers to request cash back on top of their retail transactions, so get $20 when buying groceries instead of paying $5 to withdraw that same cash from an ATM. Then buy yourself a foo-foo coffee on the way home.

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