4 Ways to Avoid ATM Fees

ATM fees can add up fast if you're not careful.

Paying extra fees is no fun. When handling financial matters, it's a good idea to make an effort to avoid additional fees so you can keep more of your hard-earned money. You're giving your money away for free when you pay unnecessary fees. ATM fees are one type of fee that can be costly, and many people pay these fees regularly.

While using rewards credit cards to pay for purchases is a smart way to build credit and earn rewards, sometimes paying with cash is a must.

If you don't have cash on you and you show up at a retailer that's cash-only, you may have to use a nearby ATM. And while ATMs are plentiful, not all ATMs that you stumble upon will be associated with your bank or be considered in-network. You should expect to pay a fee if you use an out-of-network ATM.

Typically, your bank will charge you a fee for using an out-of-network ATM, and the ATM operator will also charge you a fee -- resulting in two extra fees. Out-of-network ATM fees vary by bank, but you can expect to pay around $2.50 to $3.00 per transaction. ATM operator fees also vary but are often similarly priced.

Wondering how much these fees could cost you? Let's imagine you use an out-of-network ATM at least once a month. If you were to pay a $2.50 bank fee and a $2.00 ATM surcharge fee each time you do this, you'd pay $4.50 monthly or $54 a year. That's a lot of money!

Luckily, with proper planning, you can avoid paying ATM fees. Here are four ways to do so:

1. Choose a bank that reimburses out-of-network ATM fees

Some banks help their customers avoid losing money by reimbursing out-of-network ATM fees. If you choose your next bank carefully, you may be able to avoid paying these fees.

Ally Bank is one example of this. Customers can get up to $10 in ATM fees reimbursed every statement cycle.

2. Get cash back when using your debit card at a store

Another way to avoid paying ATM fees is to get cash back when paying with your debit card at a retailer that offers this service. Many grocery stores, pharmacies, and other retailers allow you to get cash back when paying with a debit card without charging an extra fee.

Since you're paying for your purchase with money in your bank account, you can also withdraw extra cash. The retailer will charge you for your purchase and the cash you take out. So if your purchase total is $15 and you take out $40 in cash back, you'll pay $55.

Keep in mind that there may be a limit to how much cash you can withdraw with this method.

3. Use payment apps

While some businesses may require cash payment, not all do. Some businesses may accept payments made through payment apps -- like small businesses at farmer's markets or events.

The best payment apps make it easy to make a fast, secure payment through your phone. You can also use these apps to pay family and friends back.

4. Keep cash on hand

If you've found yourself without cash frequently in the past, you may want to start carrying some cash with you at all times.

When you get cash out of your bank account regularly, you can choose to get it from an in-network ATM to avoid fees. With this method, you won't have to use an out-of-network ATM at the last moment and risk paying pesky fees.

You work hard for your money. If you pay extra fees often, you'll end up with less money in your bank account. Consider developing new habits to minimize added expenses so you can reach your personal finance goals sooner.

Are you looking to switch to a bank that reimburses ATM fees? If you're planning to open a new bank account, review our list of best checking accounts.