When it comes to making the most of your money it pays to sweat the small stuff. Australians are collectively wasting $670 million on foreign ATM fees each year – a cost that can easily be avoided.
‘Foreign’ ATM fees are those pesky charges you pay for using a machine that doesn’t belong to your own bank’s ATM network.
The cost can be as high as $2.50 per transaction. So you only need to check your account balance or make a few cash withdrawals each week at a foreign ATM to rack up close to $400 in unwanted fees annually.
If you’re not sure how much you could be paying in ATM costs, take a look through your bank account statement – it’s surprising how the fees can add up.
Despite reforms introduced in 2009 that make it mandatory for foreign ATMs to display a warning about the fee you’ll be charged, it seems we are using foreign ATMs more than ever. According to estimates by comparison site RateCity the fee grab for 2012 was $10 million more than the total for 2011 and $30 million more than for 2010. It also said four out of every 10 withdrawals are made at a foreign ATM.
The thing is, foreign ATM fees are one of the easiest transaction costs to avoid.
It may be stating the obvious, but sticking to ATMs belonging to your own bank’s network is a no-brainer when it comes to avoiding foreign ATM fees. Sure it can mean walking a bit further down the street to find a fee-free machine but it’s a habit worth getting into. Most banks offer apps that let you locate the nearest fee-free ATM right around the country.
Or, head to your nearest supermarket – Woolworths for example offers fee-free withdrawals at their check outs, and there’s no need to make a purchase to access the service. Alternatively, think about withdrawing cash when you make a purchase via EFTPOS.
It can also help to plan your cash needs in advance. I’m not a fan of carrying large wads of cash but if you’re heading out for, say, a few drinks with mates, work out how much of the folding stuff you’re likely to need. It’s a simple strategy to avoid making repeat visits to one of those independently owned machines that often charge the highest fees. It may also mean you’re also more likely to stick to your spending budget.
Your choice of everyday bank account can also play a role in avoiding or at least reducing foreign ATM fees.
ING DIRECT’s Orange Everyday account for example, will refund the ATM fee whenever you withdraw a minimum of $200. Bankwest’s Zero transaction account charges no ATM fee as long as you stick to a machine belonging to one of the major banks including Commonwealth, Westpac, ANZ and NAB.