How to avoid ATM fees and fraud


When it comes to your finances, there are few things more frustrating than feeling like your hard-earned cash is being wasted — and with ATM fees, that’s an all-too-common scenario. According to Bankrate’s 2018 checking account and ATM fee study, out-of-network ATM charges hit a record high for the 14th year in a row, with an average of $4.68 per withdrawal. Depending on how often you use ATMs, that kind of fee can make a pretty decent dent in your bank account. “Banks have to spend money to operate ATMs and transfer money to other banks, so ATM fees come in handy to offset these costs,” said Brian Walsh, a certified financial planner and financial planning manager at SoFi. Of course, that doesn’t exactly make it less frustrating for the people getting charged. As Walsh added, “The bottom line is ATM fees, [as well as] maintenance fees and overdraft fees are all annoying ways that most banks charge customers for simply trying to spend and save their own money.” Here’s how to mitigate the financial damage.

Use your own bank’s ATMs as often as possible

“The best bet for finding ATMs without fees is to use the ATM directly associated with your financial institution,” said Daniel R. Hill, a certified financial planner and president of investment advisory firm D.R. Hill & Associates. Most banks have apps that allow you to search for nearby ATMs, so you can easily find the best options on the go.

It’s also possible, Hill added, that your bank partners with other banks or financial institutions, in which case you may be able to use those ATMs for free as well. “If your banking account is associated with alternative financial lenders, such as a credit union, they too have options for you,” he said. “Typically, credit unions participate in ‘shared branching’ services where you can use your ATM card at a partnering credit union without fees or service charges. There may, though, be limits as to how much money you can withdraw on a daily basis, so it’s best to inquire at your lender the daily cash withdrawal limits.” Your debit card may also be part of an ATM network that includes free withdrawals, The Balance reported; so it’s a good idea to look into all of your options before you head out.

Open an account with a bank that reimburses ATM fees

Not all banks are created equal; and there are some that not only waive fees at their own ATMs but also pay you back for fees charged at other ATMs. “One smart way to avoid fees is to open a checking account with an online-based financial institution, as many of these offer ATM fee reimbursement,” said Matt Frankel, a certified financial planner at The Ascent. “In these cases, you can use any ATM without worrying about fees.” Online banks like Aspiration and Radius offer account options with unlimited ATM reimbursement, as does Schwab Bank; while companies like the credit union Alliant and the online bank Ally offer reimbursement up to a certain amount each billing cycle.

Get cash back when making purchases

“Another strategy that will help you avoid ATM fees is to ask for cash back when you use your debit card for other transactions,” Hill said. “The cash back feature does not add fees to your overall purchase.” If you need cash immediately, you can buy something small (like a pack of gum) and withdraw the amount you need in that transaction; or you can plan ahead and ask for cash back when making any usual purchase.

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Be vigilant about potential fraud

Saving money on ATM fees doesn’t do you much good if you fall victim to fraud during your transaction anyway, which can unfortunately happen in a few ways. The most common form of ATM fraud is skimming, in which thieves attach a card-reading device to an existing ATM so they can get your account information after you swipe your card. Other fraud tactics known as grabbing and trapping are also common, Walsh noted. “Grabbing occurs when your card gets ‘stuck’ in the machine and the criminal removes it when you go for help,” he said. “Trapping occurs when your money gets stuck in the machine and the criminal removes it when you go for help. Grabbing and skimming could also be combined with a way for the criminal to discover your PIN such as watching you, installing a fake keypad or installing a camera.”

To avoid falling victim to fraud, familiarize yourself with the look and feel of skimmers and other red flags; and do a visual inspection before you insert your card or enter any personal information. Hill recommended checking for any tiny cameras (known as pinhole cameras); and even if you don’t see one, cover your hand as you enter your PIN just in case. From there, Hill said to make sure the ATM is intact by checking a few things. “Cyber criminals will physically insert a façade covering over top the actual institution’s device as a means to access your cash,” he said. “If the ATM appears wobbly or misaligned, or if the institution’s stickers or logos appear misprinted and look ‘off,’ go to another ATM.” Check out the keypad where you enter your PIN as well, as Hill said some thieves apply overlays that allow them to steal your info after you enter it. “If the actual keypad of the ATM feels thick, has a sponge-like feel or if the keypad seems loose, don’t input your PIN,” he said.

Frankel also recommended using ATMs in more visible, high-traffic locations (like bank drive-throughs or near store checkouts) that are more likely to be regularly monitored; and Walsh suggested keeping an eye out for anyone standing too close to the machine. Ultimately, a visual inspection can help you avoid a fraudulent ATM, but there’s no way to be completely certain a machine is safe. So, as Walsh said, “the best advice is to pay attention to your accounts and report any suspicious activity.”