Updated on 02.17.12

Get a Bank Card with a Very Large Fee-Free ATM Network (47/365)

Trent Hamm

For the last few weeks, we’ve been focusing on how to save money on transportation. Now, we’re going to start looking at another potential money sink: banking and investing.

Get a Bank Card with a Very Large Fee-Free ATM Network (47/365)

There are a handful of tips from 365 Ways to Live Cheap that felt really relevant to my life as I was writing the book in 2007 but don’t quite feel as relevant today, though still useful. This is one of them.

I found a few bank statements from 2005 and estimated that I made 108 ATM transactions that year (averaging 9 a month). If I made that many transactions outside my network, assuming a $2 fee for out-of-network ATM transactions, $206 vanishes from my wallet. That’s a car payment on a reliable used car.

So, why isn’t this tip as useful any more? The big reason is that I don’t use ATM machines as frequently as I used to. Mostly, I use them to withdraw cash for things like farmers markets or community festivals or for small incidental purchases.

There are a few reasons for this.

First of all, I make more of my purchases online than I used to. With the exception of groceries and household supplies, I actually do the vast majority of my purchasing online at websites such as Amazon.com.

Second, my commute is much shorter. Instead of driving 20 miles or so to work, I now walk to my workplace without passing by a single business. The temptation to stop for a coffee, check out the new releases at the bookstore, or other similar things is much smaller than it once was. Many of those incidental things are paid for out of pocket.

Finally, I don’t buy nearly as many things as I used to. Not as much cash – in the form of cards or hard currency – flows out of my pocket as it did five or six years ago.

So, is this tip still useful?

I went and looked at my transactions over the last year. I used an ATM 23 times. Only two of those uses were on ATMs outside of my network, and those each cost me a $2 fee. If I had made all of those transactions outside of my ATM network, it would have cost me $42 more. While it’s not the much larger amount I would have saved in 2005, it’s still well worth keeping track of.

There are a few tactics you can use to make sure that most of your transactions are inside your network, thus saving you those fees that can sneak up on you.

First of all, identify a fee-free “home” ATM. There should be at least one ATM that doesn’t charge you a fee that’s convenient to your typical daily activities. I have one of these – I go near it several times a week during the normal course of activities. That’s just the default ATM I use for activities, and I never see a fee.

Second, plan in advance. There’s nothing wrong with being spontaneous, but even spontaneous events can be seen in advance. If you know you’re going out this weekend and will need some pocket money, get it now. Whenever you see a cash event coming up, get the cash now, not later. Later means that you’ll be limited in your ATM choices and will likely hit a fee.

Third, make sure your bank has a big ATM network. Most banks make their ATM networks clear on their website, often even mentioning ATM locations. Know the locations for your bank and, if their location list is a short one and doesn’t cover areas where you often find yourself, use that as a tip that you might want to be looking for another bank.

Finally, have some willpower. I used to be afraid to withdraw $100 or more from the ATM for future events because I was always afraid I would waste it on unimportant things. This would cause me to make more ATM trips than would be necessary, and because I was stopping so frequently, I would often visit ATMs that would ding me with unnecessary fees. Having enough willpower to not spend cash simply because it’s in your pocket not only saves you money from unnecessary purchases, it can save you money from ATM fees, too.

These tactics together will minimize your money lost to ATM fees, even if you’re not using them as much as you once did.

This post is part of a yearlong series called “365 Ways to Live Cheap (Revisited),” in which I’m revisiting the entries from my book “365 Ways to Live Cheap,” which is available at Amazon and at bookstores everywhere. Images courtesy of Brittany Lynne Photography, the proprietor of which is my “photography intern” for this project.

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  1. AnnJo says:

    Assuming you have the willpower not to spend money just because you have it nearby, it would be wiser to keep a more substantial cushion at home and replenish it two or three times a year.

    A local or regional power outage could increase the need for cash while putting ATMs and credit and debit services offline. If you needed to evacuate due to a weather event, earthquake, etc., you should have enough cash on hand to tide you over for at least a week, without relying on access to your bank accounts.

    Less likely but still possible would be your bank’s sudden closure or limitation on cash withdrawals, a general bank holiday, or a seizure or freeze of your own accounts, as can happen in some divorces, or problems with tax authorities, or even by mistake.

    Obviously, you don’t need to walk around carrying several thousand dollars, but it wouldn’t hurt to have some cash is a safe hiding place at home just in case.

  2. Liz says:

    Another option to a large ATM network is a bank or credit union that reimburses for out-of-network ATM fees. The bank I use (USAA, best bank ever!!!) reimburses up to $15 in out of network fees each month. Actually, they have a decent network anyway and I have never even approached needing the $15 limit, so I’m not sure that’s still the limit.

  3. Other Jonathan says:

    I haven’t been to an ATM in years! Not because I don’t use cash (I do with some frequency), but because my wife is at the bank several times a week for work, and she just withdraws some cash while making a deposit once or twice a month. We do make sure to always plan in advance so we have “free” cash available (as opposed to having to go to an out-of-network ATM) when traveling or making a large purchase.

  4. Paul says:

    A few years ago, I noticed I was averaging $47 a month in ATM fees. I switched to a fee free credit union. Love it.

  5. Des says:

    We used to use ATMs all the time – but exclusively for depositing money. This is probably a unique scenario, but our renter pays in cash every month, so we perpetually have more cash on hand than our monthly expenditures. Now that we use Perkstreet, they let you deposit cash through MoneyGram, so we deposit it whenever we are at the grocery store. If I needed to pull cash out, I would get cash back at the register at the grocery store.

    Also, +1 to what AnnJo said. Cash should be part of your disaster kit, along with at least a couple days canned food and clean drinking water.

  6. lurker carl says:

    The creeps hanging around ATMs are reason enough for me to continue using a live teller at a financial institution in the daylight.

  7. Slccom says:

    I do my cash withdrawals at the grocery store. Write a check for over the cost, and use that.

  8. tentaculistic says:

    I like that Trent brought up the fact that not all tips that worked several years ago still worked for him. I like that honesty and being up-front that things change.

    #6 lurker carl – do you really have creeps hanging around ATMs where you are? I guess I only go during daylight hours (not really much of a clubber these days) and I sometimes see other customers but they are mostly moms with kids and the like. I guess I hadn’t really thought of the ATM robbers for awhile, since nothing has tripped my hyper-sensitive fear button at ATMs in awhile.

    People mention cash as part of your disaster kit – very good point! A best practice I’ve drifted from and need to go do now: it’s a good idea to have $5 – $10 in your car visor (helps with surprise tolls too if you don’t have EZPass, or for unexpected parking), and another $10 and a subway card (if applicable) in your work ID card holder.

  9. Johanna says:

    If you’re going to keep a large amount of cash (or even a small amount of cash) in your home, make sure you know exactly how much is supposed to be there, and check regularly to see if any is missing.

    Do this even if you think your stash is in a safe place that only you can access. Otherwise, if somebody else does find it, they can steal from you bit by bit and you’ll never even know. That has happened to me. Eventually I did notice, but it’s hard to get the police to take you seriously when you can’t tell them how much money was taken or when.

  10. AnnJo says:

    Johanna, completely agree. For me, I keep a Quicken account of the fund, not so much from concern about theft, but just so that I know where it’s going and when I should replenish it.

    Bummer to find out people you live with are stealing from you.

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