Fees and services: How to avoid those costly ATM surcharges Banking Center

Exactly what is a surcharge and how does it work? Generally, you'll know you're being surcharged when, before you use an ATM, a warning on the ATM screen informs that you will be charged a fee, which typically has been up to $2, if you continue with the transaction. The charge automatically is deducted from the account on which you are conducting the transaction, and appears on your receipt. This charge may be over and above any foreign ATM fees you may be paying to your own bank, and can result in a double whammy for many ATM users. You could get zapped with two fees for one ATM transaction. The national ATM networks, which long had opposed surcharging, in 1996 removed their ban after at least 14 states adopted legislation overruling it, and surcharging already had surfaced in many markets. Regional networks already had permitted surcharges, but to date, surcharging has been particularly prevalent at heavily traveled off-site locations, such as casinos, tourist attractions, airports and shopping centers. Banks argue that the surcharges provide them with more revenue to install ATMs at sites that wouldn't ordinarily have them. The end result, they contend, is greater customer convenience. Consumer groups, on the other hand, counter that the charge double-whammies ATM users and simply makes ATMs major bank profit centers. Last year, Janice C. Shields, banking researcher at the Center for Study of Responsive Law, reported that in 1995, banks already increased profits $2.2 billion as a result of ATM transactions. The new charges, the report says, should result in an additional $2.7 billion in ATM revenue. Despite the additional potential of ATM revenue, not all financial institutions rushed to implement surcharges.. >The Center for Study of Responsive Law and U.S. Public Interest Research Group suggest these ways to avoid ATM surcharges: Use your own bank's ATM whenever possible. Avoid ATMs that surcharge. If you use an ATM regularly, withdraw larger amounts of money to reduce the number of times you are charged a fee. Use a teller instead of an ATM, especially when lines at the bank ATM are long. Be certain, however, that you won't be charged a teller fee. Consider personal checks, traveler's checks and credit cards instead of ATMs, especially when traveling. Ask for cash back when paying with debit cards at supermarkets, drug stores and gas stations. Seek out surcharge-free ATMs. Online directories are available at The Co-op Network and Surcharge Free Directory. Cut down on ATM visits by withdrawing more cash per visit. Fortunately, surcharges are typically clearly displayed on the screens of ATM machines, and customers are permitted to elect either to continue the ATM transaction and pay the surcharge or cancel the transaction. Thinking about an Auto Loan? Home Equity? Any bank product? We give you unbiased rates for your area at bankrate.com.