While ATMs are a valuable service offered by banks, the services often come at a hefty price.  The numbers support this statement: between 2007 and 2012, ATM surcharges rose by 20% (up to $2.10, on average). ATM fees, those rascally things, are not always straightforward, and consumers don’t often realize see their effects until their review their money-drained bank account statements after the fact.

The Mystery Fee

There are actually two types of ATM fees: the Surcharge Fee and the Foreign Fee (and no, the Foreign Fee does not arise only if you’re traveling abroad).  Both of these fees arise whenever you use an ATM out your bank’s network.

The Surcharge Fee is charged by the owner of an ATM. While the average surcharge fee is $2.10 according to a U.S. Government Accountability Office study, that number can reach as high as $5.oo in  large metropolitan areas. 

The Foreign Fee is your bank’s way of taxing you for accessing cash from an ATM machine outside of its network.  It is bit more clandestine than the first, since it usually doesn’t appear until you’re reviewing your bank statement.  In 2012, the average Foreign Fee in the U.S. was $1.52 amongst traditional banks and $1.29 amongst credit unions.  Many users of award-winning Personal Capital apps have reported that they did not know about the Foreign Fee until they began tracking their checking account together with their credit cards.

A Tax on Your Capital

If you add up the average Surcharge Fee and Foreign Fee, the average ATM fee is over $3.50 per transaction.  While $3.50 may not seem like much, if you’re withdrawing $100, that’s like a 3.5% tax on your capital.

Thankfully, over 85% of cash withdrawals are from in-network ATMs.  But for the rest, it seems like the tax on hard-earned capital is steep. Making money is hard enough.  Spending it on your terms each month should be simple – and tax-free.

Stemming the Tide, and Taking Action

Fortunately, bank fees have not gone completely berserk.  In 2011, JP Morgan Chase tested out a $5 ATM fee (up from $3); public reaction caused this unpopular experiment to be brief.

And for individuals, advances in technology have helped to give us new ways avoid ATM fees beyond just being prepared with a level of cash reserves in your wallet.

Your Smartphone.

These days, some banks have mobile apps with branch locators.  You might even want to bookmark the page on your smartphone from your bank’s website so you can easily access.  Don’t miss out on going to branch if it’s nearby.

Online Banks

As a means to acquire customers – and make up for their lack of brick & mortar presence – many online banks offer ATM-fee reimbursement.  With no brick-and-mortar stores to operate, these types of banks have fewer operational costs and are able to pass on these savings to customers by offering products like high-yield checking accounts.

Use Personal Capital’s arsenal of digital tools to find out about what ATM – and other – fees are eating in to your hard-earned money.