How to stop paying ATM fees

I rarely pull out cash, so when I do, I’m often greeted with a message that lets me know there’s a fee. Like most people, I just click “Yes” and move on with my day. Most of the time I don’t even register what the fee actually was.

It was a major bummer when I started researching this piece and one of the first things I found was that the average ATM fee has increased over the last few years and now sits at $3.08, on average. So every time I take cash out, I’m paying $3. And for some folks, that’s double because they’re paying a fee to their bank, as well as the ATM servicer.

I think it’s time we all decide unanimously to stop paying those pesky fees! Today, I’ll offer a few ways to do just that. Let’s get started!

An ideal way to avoid ATM fees is to choose a bank that doesn’t charge them, to begin with. While nearly every bank will let you use their in-network ATMs for free, you will get hit with a charge if you use an out-of-network ATM. As you’ll see below, some banks will reimburse those fees, but many do not, and many only reimburse them up to a certain amount.

A few banks charge NO ATM fees and reimburse all fees that you incur when using an ATM, even an out-of-network one. As you’ll see below, I lay out the case for moving away from cash. That is my personal preference and where I see spending going in the future. However, if you are a heavy cash user, I strongly recommend finding a bank that charges no ATM fees, period.

A few banks come to mind, but my favorite and most recommended is Axos Bank. Axos will let you use ANY ATM in the United States, and they will not charge you a fee. Also, if any type of fee is assessed, they will reimburse you up to an unlimited amount. So you can withdraw $20 in cash from an ATM five times a day every day of the week, and you won’t pay a dime for that. 

Nowadays, most banks have a reasonably sizable ATM network. But that doesn’t mean you won’t get hit with ATM fees. One of the best ways to avoid ATM fees is by using a bank that reimburses any assessed fees.

Remember that just because your bank doesn’t charge you a fee for using an in-network ATM, it doesn’t mean you won’t be hit with a fee for using the machine. For example, some in-store ATMs (though technically “in-network”) will charge a fee to use.

Using a bank that credits these fees back, you’ll easily avoid ATM fees (up to a certain amount, of course). One example is CIT Bank’s eChecking account. Not only do they not charge ATM fees, but they’ll reimburse you up to $30 per month on other banks’ ATM fees.

Credit unions are often forgotten about, especially in today’s “next-gen” banking world. Credit unions are often small banks that don’t have a flashy mobile app or effective marketing. That’s because they are nonprofit organizations owned by the members that they serve.

But there are some significant perks to using a credit union. One of those includes ATM usage. If a credit union is part of the co-op ATM network, you will get access to more than 30,000 fee-free ATMs across the United States and nine other countries. It’s the nation’s largest network of free ATMs for credit union members. It even has a more extensive fee-free network for ATMs than Chase bank.

There are downsides to using a credit union, though, so I suggest you do your research first. But if you’re in an area that has a credit union with multiple co-op ATM network ATMs, and you don’t care about having a flashy mobile app, then it might make a lot of sense for you.

As you’ll notice, some of my suggestions involve avoiding cash entirely, and this is another one that I am passionate about. Using a rewards credit card will not only earn you rewards for your spending, but it will also safeguard your money and your purchases. You can quickly lose cash, too. While it may seem unlikely, data shows that over 400,000 pickpocketing incidents occur in the world every single day.

Besides these risks, credit cards are just safer. If you have to dispute the transaction, your credit card will put a hold on that amount so you won’t have to pay for it while that transaction is being disputed. If you try to do this with cash or a debit card, it will be far more complicated, and you won’t have the cash to use if you need it. 

A credit card will also give you extra benefits—for example, extended warranties and purchase protection. Lastly, and going back to my first point, by using a rewards credit card and paying it in full each month, you will not pay interest, and you will earn reward points, which you can exchange for things like cash, gift cards, travel, and more.

The Chase Sapphire Preferred® Card is an excellent example of a card that offers all of these benefits and much more. 

The Chase Sapphire Preferred® Card offers 5X points on travel purchased through Chase Ultimate Rewards®, 3X points on dining, 2X points on all other travel purchases. Plus, you’ll earn 1 point per dollar spent on all other purchases. And if that’s not enough, know that you’ll also earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 when you redeem through Chase Travel℠.

If you are using an acceptable bank, chances are they also had an excellent mobile app. Usually, within that mobile app, there is a feature to locate the free ATMs around you by using your location with the GPS in your phone. 

Outside of your bank’s mobile app, certain apps are separate from a bank designed just to help you find a fee-free ATM. The Allpoint ATM network, for example, has over 55,000 fee-free ATMs across the world. Allpoint now has an app where you can locate their ATMs based on your current location.

Sometimes, moving to a new bank doesn’t make sense. Maybe you’ve been with your bank for years, and you want to stay with them. In that case, a great way to avoid ATM fees is to take advantage of in-store cash back.

To do this, you have to pay with your debit card and make sure you choose “Debit” at the register (instead of swiping it and charging it as a credit card). Assuming you’ve done this correctly, you’ll enter your PIN to pay for your purchase, and the machine will ask if you want cash back. 

This is most often done at the grocery store, and all you need to do is make a small debit card purchase. You can even buy a pack of gum for less than two dollars. After that, you can get cash back up to the amount that your bank allows, which I’ve seen as high as $500 per day. However, Novo enables you to get up to $1,000 per day in-store cash back using your Novo debit card. 

A digital wallet is a “wallet” on your phone to store credit and debit cards electronically. The best example is Apple Pay, which is now being accepted by over two million merchants, both online and in-store. If you’ve never used Apple before, it’s quite simple. Instead of swiping a card or using cash, you hold your phone up to a sensor, which will automatically charge your debit or credit card.

And this isn’t just a fad. More and more merchants are beginning to accept digital wallets, and more and more fintech companies are coming up with forms of payment. Some of the more recent ones I’ve seen are Cash App, created by Square; Venmo, which is now owned by PayPal; and Zelle, which many banks already use within their mobile apps (like PNC). This is in addition to Google Pay and Samsung Pay, which are already quite popular.

So there is a legitimate argument that digital wallets could eventually replace cash entirely. While that seems unlikely, I agree with the notion of digital wallets becoming more prevalent as cash usage continues to dwindle. So if you start getting on board now and use your digital wallet, you will rely less on cash from ATMs and thereby pay little to no ATM fees in the long-run.

» MORE: Best Payment Apps.

According to the Diary of Consumer Payment Choice, consumers use cash only 26% of the time when making a purchase. The data also shows that cash usage decreased by one payment per month. All this is to say that, generally, people are using cash a lot less.

So that begs the question, should we even be using cash current day? I think there was a time and a place for it, but overall, you have far more security with a credit or debit card, and nearly all places accept those forms of payment anyway. 

In the rare circumstance that a vendor does not accept a card, it’s probably smart to carry a small amount of cash in your wallet. And as you can see throughout this article, there are plenty of ways to get that cash without paying a fee.

From a budgeting perspective, this might seem counterintuitive but hear me out. Whether you pay a fee or not, it often makes the most sense to withdraw as much cash as you can from an ATM when you’re going to do it. Even if you don’t use that full amount, you can stash it away in a safe or a dresser drawer for when you need it. This way, you won’t be stuck in a situation where you either have to pay an ATM fee or you have to make another run to a free ATM that may not be near you at the time.

Another nice thing about having a large amount of cash on hand at home or in your wallet is if you are in a situation where cash is your only option. I have had contractors come over, such as plumbers or somebody to fix an appliance, and only accept cash or check.

Whether you use cash or not is entirely up to you. If you are a cash user, make sure you are using the right bank, and you have an extensive network of free ATMs around you. Also, take advantage of some of the other tips I shared in this article.

However, I would encourage you to explore other options outside of cash, such as a rewards credit card or a digital wallet. There are far more benefits to using these types of payment than cash, and you can accomplish the same thing.