It’s robbery! How to avoid pesky ATM charges

Q: I get hit with fees every time I go to the ATM machine. How can I avoid ATM surcharges?

A: The good news is that more and more banks — and I see this as I walk around Manhattan — are voluntarily waiving these buck-fifty fees. (Kudos to Washington Mutual, Signature and anyone else in on this trend.)

If you're not seeing these freebies popping up in your neck of the woods, let's hope you soon will. Otherwise, ATMs can be a really expensive nuisance. It's not uncommon to be charged $1.50 for using another bank's machine (or charged by your own bank for exceeding the maximum number of visits they allow).

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Even worse are those generic money machines you see at convenience stores with fees as high as $3. These surcharges can really add up, slowly but surely busting your budget for the sake of convenience. (Not that visiting the teller is much better, as many banks also now charge customers for teller visits over a maximum, sometimes as low as four times a month.)

Want to avoid ATM charges? Here are some suggestions:

• Use your ATM card to pay for things at stores where they allow you additional cash back. There's still generally no charge for this. (By the way, if you think this is the store doing you a favor, think again. Rather, it is a convenient way for them to avoid having to take cash to the bank — and, like you, having to pay for the privilege.)
• Anticipate your cash needs for the week and take out enough so that you don't have to go to the ATM as often.
• Look for no-surcharge advertisements from smaller banks hoping their friendly attitude will win you over to their side of the street. With the growth in competition brought on by the relaxation of banking regulations, that is happening more often these days.
• Using an ATM while traveling abroad may seem like a great way to get foreign cash — until you see the fees when you get home. Even traveler's checks costing 1 percent of the total are cheaper.
• Use your own bank's machines. Get a directory of where your bank has ATMs — one may be closer than you think. Conversely, if you find yourself using another bank's machines more often than your own, it may be time to switch banks.

Jean Chatzky’s Bottom Line
This week: Automate your paycheck
Trying to save money on banking? Are you taking advantage of direct deposit? Not only is it easy, but most banks will knock $1 to $2 off your monthly account maintenance fees if you have your paychecks direct-deposited. Check with your employer to see if they have special deals with local banks for direct deposit.

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And don't stop with your paycheck: You can also direct-deposit expense and travel reimbursements, Social Security and Veteran's payments, retirement and mutual fund distributions, and tax refunds. In all of these cases, direct-depositing saves you a trip to the bank.

With taxes — coming up soon, of course! — there's an additional bonus: If you file electronically and elect to have your refund direct-deposited, you'll shave weeks off the time it takes to get your money back.

Jean Chatzky is the financial editor for “Today,” editor-at-large at Money magazine and the author of “Talking Money: Everything You Need to Know About Your Finances and Your Future.” Her latest book, "Pay It Down: From Debt to Wealth on $10 a Day," is now in bookstores. Copyright ©2005. For more information, go to her Web site, www.JeanChatzky.com.

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