Before the ATM cash had to be withdrawn either at the bank or through cash back arrangements at the store. Both were annoying and inconvenient. However, the process of obtaining cash became revolutionized when the ATM came into existence. With the ATM customers can get the cash they need without having to stand in a long line. They can also do other things such as check their account balances, transfer money to another account or depositing more money.

Yet, just because ATMs are extremely convenient doesn’t mean consumers should go crazy in using it. This is because each time an ATM not associated with their bank is used, a person will acquire fees. And although these fees are low initially (usually ranging from $1.50 to $4.00), they can add up over time if the ATM is used too much. More importantly, when you are accessing only a small amount of money, the fee relative to the amount of money is significant and turns into a costly transaction.

So, why do banks charge ATM fees in the first place? Well, as already stated, they do not charge their own customers who use their ATMs. They only charge if ATMs outside of their institution are used. The reason why this is done is because the bank has to pay transaction fees from the outside bank’s ATM. The other bank must also pay a surcharge fee, since the transaction is being done from an individual who is not a member of their institution. Of course, the consumer ends up paying this cost, not their bank.

Another reason why fees are charged is because running ATMs are expensive. This is especially the case if the ATM is placed in a major metropolitan area. In these situations the ATM fee, which normally ranges $1.50 to $2.00 can nearly double in price, making a person pay an amount that is the equivalent to a fast-food lunch. If a person uses these types of ATMs often, little by little they are depleting their bank account. One might be able to handle this if they hold high balances, but for others who live closely, too many ATM fees could cause them to get the infamous NSF (Nonsufficient Funds Fee).

Fortunately, with a little planning it is possible to limit usage of the ATM. This process starts when one initially determines the institution they want to bank with. For example, determine where you use the ATM the most frequently. Does your bank have more ATM’s in that region is or is there a bank with a larger network in its place. This way you are more likely to find ATMs they can use in which there would be no fees.

However, if banking with a major institution is not possible, one will have to take out as much at one time as they can when they are withdrawing from the ATM. There are also cash back options at stores, where customers are given a certain amount back on their purchases. The amount is simply added onto the store bill, so no extra fees are required.

If none of these alternatives are suiting, then a person should consider using a credit card, debit card or checking more often. Very few places nowadays require cash only. In fact, even most fast food places will accept checking or electronic forms of payment. The only thing that a person needs to keep in mind is that if they’re using a debit card, they should always make sure the cashier rings up the purchase as ‘credit’. The money will still get deducted as if it were debit, except there won’t be any additional fees. Otherwise, if a person chooses ‘debit’, they will get charged extra for the transaction.

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