How many times have you been out and about and thought, “Ah, I don’t have any cash to pay for my train ticket or oh-no this Chinese restaurant doesn’t accept EFTPOS!” We’ve all been there and the only solution is to find the nearest ATM ASAP.
Unfortunately, we’re paying a big price for this ‘convenience’. ATM fees are on the rise and this year Aussies will pay a whopping $600 million in ATM fees! Here at Mozo we call it the ATM trap because people are stuck in an annoying situation where they need cash fast but their own financial provider’s ATM is nowhere to be found, or at least a good ten minute walk away.
The problem is the ATM market is not competitive because customers don’t have time or understandably can’t be bothered, to venture around town to find a fee-free ATM. On top of this there is no regulatory control of ATM fees and the Reserve Bank’s ATM reforms of 2009 have simply not worked.
The banks charge us $2.00 just to access our own cash if we’re not a customer, even though the cost of processing an ATM transaction is probably under $0.10. And if you think $2.00 is a hefty ATM fee, Customers ATM and Cashcard (the two main independent ATM operators) have just hiked up their ATM withdrawal fee from $2.00 to $2.50. Never heard of these guys? Well you’ve probably used one, as they own roughly 30% of all ATMs in Oz!
You’ll find independent ATMs in places like your local convenience store, where you buy the milk, often under the disguise of bank-branded ATM machines. Some of the culprits that allow independent providers to use their brand logo on ATMs with a $2.50 withdrawal fee are the Bank of Queensland, Suncorp, Bendigo and Citibank.
Another nasty sting, that you’ll find when using many ATMs is a balance inquiry fee. RediATM (the credit union ATM network) has just increased their fee from $1.00 to $2.00. So if you use another bank’s ATM to check your balance and then make a withdrawal, you could pay up to $4.50 for the privilege! To avoid the bite of balance inquiry fees, we advise using the internet, your smart phone or phone banking to access your bank balance.
At the end of the day, the best option for avoiding ATM fees is researching and using your own bank’s ATM network. For example, Westpac customers don’t get charged for withdrawing from St.George, BankSA and the Bank of Melbourne ATMs. CBA customers can also make fee-free withdrawals at Bankwest ATMs. And NAB customers can do the same at RediATMs.
While the two biggest ATM operators have jacked up fees, the Mozo rate chasers will be on the case, watching the banks closely to see if they follow suit and make $2.50 the new standard ATM fee for withdrawals.
Here’s 5 tips for avoiding nasty ATM fees!
- Use your own bank’s fee-free ATM network
- Withdraw cash with an EFTPOS transaction
- Use NAB ATMs which charge $1.50 per withdrawal and $0.50 per balance inquiry
- Check your balance online, on your mobile or over the phone
- Get a bank account that gives you fee-free withdrawals everywhere, like the ING Direct Orange Everyday Account (for withdrawals of $200 or more).
Want to learn more about the ATM fee trap? Take a look at our awesome ATM infographic!