Fighting $5 Back Against ATM Fees

by Ryan Guina

Five dollars just doesn’t have the same purchasing power it used to – at least not in IL, where Chase Bank is charging non-Chase Bank customers $5 to access their ATM. The only place I’ve ever seen $5 ATM fees is in a casino, where you expect ATM fees to be high. But you don’t expect to see a $5 ATM fee when you are randomly walking down Main Street. And by the way, that $5 fee is on top of any fees the customer’s bank charges, so that single cash withdrawal could cost a non-Chase customer $8 or more. Not a happy prospect just to access a little cash.

ATM Fees Are Rising

ATM Fees Are Rising

The bad news is that this is happening on a trial basis and if Chase doesn’t notice a substantial change in the profitability of transactions at their ATMs, then these increased ATM fees will be rolled out across more states. And where one bank goes, more are sure to follow – just look at the current interest rates.

What are your choices? I use a cash rewards credit card for almost all purchases, but I usually carry about $40-$60 in cash which I use at local businesses or small purchases. If I think I might need more, then I will go to the bank and pick it up so I don’t have to pay ATM fees. If you just happen to be out and about and your bank isn’t near by, then try to find another ATM with a lower fee.

You can also get creative. One of my favorite ways to save money on ATM fees is to buy something from a store and get cash back. I will go into a grocery store and buy a pack of gum just to get $20 or $40 cash back. It’s cheaper than using the ATM and you get something to show for your money.

Use Free ATMs. You can also change banks. Of course, this is a drastic step, but it may be worth looking into. Some banks offer to refund ATM fees for customers (up to a certain point), and others are part of the Allpoint ATM Network, which is a large network of ATMs which don’t charge member banks fees. A similar network is STARsf®, which features 37,000 surcharge-free ATMs in their network (PerkStreet Financial is a prominent example).

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Photo credit: tpholland

Published or updated February 12, 2013.
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{ 9 comments… read them below or add one }

1 Echo

I never carry cash since I use my rewards credit card for every purchase, however it’s probably smart to keep a small amount of cash in my wallet to avoid a situation where you need it and have to pay outrageous fees to access your money. $5 is just crazy.

Thanks for the mention!


2 Ryan

I usually have a little pocket money, but I can go months without using the ATM. Lately, though, I’ve been trying to use cash when I buy things from local shops and smaller vendors. I know the transaction fees are a big deal for them and a competitive disadvantage. I don’t carry around enough cash for most other purchases though, such as groceries, gas, etc. And I prefer to pay at the pump when I get gas – much more convenient than going inside to get the pump turned on, then pumping the gas, then waiting in line to pay!


3 Glen

Oh man, $5 is just insane! I really hope this model doesn’t stick for Chase. Not only do they have a ton of ATM’s but other banks might decide to jump on this price structure as well.

The ATM is supposed to save banks money, no? They no longer need to pay a teller to make the transaction. Instead banks use the ATM as a means to make extra income because they know people will use it.


4 Ryan

Chase is also testing $4 ATM fees in Texas and I wouldn’t be surprised to see more banks follow suit. Even if the $5 fees don’t become the norm, I wouldn’t be surprised to see other banks go into the $4 range, with higher prices in premium locations.

I don’t if ATMs are supposed to save banks money. They may have claimed that at one point, but I don’t think I’ve heard it recently. ATM networks are actually very expensive to maintain. I believe I read that Chase spends around $200 million a year maintaining their ATM network (but it is profitable, if that gives you any indication of their business model). ATMs are about convenience, and banks know customers are willing to pay for that convenience – either by becoming a customer of the bank, or by paying the bank’s transaction fees.


5 krantcents

I hate paying fees. I guess it is a consequence for poor planning.


6 Lindy Mint

$5, ouch! Though, frankly I’m not surprised. Fees have been creeping up over time.

I bank with USAA, and since they don’t have branches they reimburse me for all of my ATM fees. I think there might be a limit, but I never in seven years have exceeded it. It really is handy because I can visit any ATM that is convenient without worrying about fees. Though I know this isn’t an option for everyone.


7 Ryan

I love USAA – I’ve been with them for over 10 years now. I believe they have a $15 limit per month for ATM fees, but to be honest, I rarely use ATMs, so it’s never been an issue for me.


8 Jon | Free Money Wisdom

Geez, that’s ridiculous! Another great reason to leave Chase for a local credit union. Since all credit unions are connected, you will never have to pay fees at an ATM!


9 Mimi

I think banks other than Chase should charge $5 fee for Chase cardholders to use their ATMs.


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