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How To Avoid ATM Fees

12.28.2011 by Matt Jabs //

Few things burn me more than being charged an ATM fee for withdrawing my own money… so I developed a system that enables me to avoid ATM fees altogether – here’s how I do it.

Use banks with no atm fees

When considering a new bank or credit union, look for one that doesn’t charge ATM fees.  If they do charge fees be sure they have a system in place that allows you to avoid being charged the fees such as belonging to a nationwide ATM network.

Betsy and I use Capital One 360 for our main checking and savings accounts and have been able to completely avoid ATM fees.  Capital One 360 is a member of the All-Point Network of ATMs giving us access to our cash at any Target store nationwide, along with many other locations in every part of the country.  If we need to hit up an ATM we can always find something close.

If you’re interested in Capital One 360, you can read more about their checking accounts here and more about their savings accounts here… or you can read my Capital One 360 review.

Update: Shortly after publishing this article Ally Bank contacted me to let me know that they reimburse all ATM fees our customers incur in the United States, including those charged by other banks!  If you’re interested you can read more about Ally Bank’s Fee-free interest checking here and more about their savings accounts here.  I also endorse them and have noticed they’ve really stepped up their focus on customers over the last few years.

If you are not looking for a new bank then you can employ the final two tactics to avoid or greatly lessen your ATM fees.

Use a cash envelope system

Back in November of 2009 Betsy and I attended Dave Ramsey’s 13 week Financial Peace University course – at our local church – which inspired us to adopt a cash envelope system for several specific budget categories.  For our situation we decided using cash would work best for:

  • Groceries
  • Dining out
  • Entertainment
  • Clothing
  • Miscellaneous

These categories may not be best for everyone so be sure to figure out what works best for you.

We each carry our own cash and manage it in a way that works best for us.  Betsy carries and uses the Dave Ramsey cash envelope organizer that came with our FPU kit, while I stick to a much simpler system of keeping a wad of cash in my wallet and journalling each transaction to keep track of each category.

I only recommend keeping all your cash together if you journal the spending; otherwise you can easily spend much more in a certain category than allotted.  If you’re not going to journal the activity it’s best to keep the cash separate for each category.

Withdraw money once per month

To avoid fees, simply withdraw your cash envelope money once each month rather than hitting up an ATM every time you need money.

Here is a detailed breakdown of how much Betsy and I use for each category:

  • Groceries – Betsy gets $260, Matt gets $100
  • Dining out – Betsy gets $40, Matt gets $20
  • Entertainment – Betsy gets $40, Matt gets $20
  • Clothing – Betsy gets $60, Matt gets $20
  • Miscellaneous – We both get $100

If you do the math you’ll see that we need $760 total, so at the beginning of the month Betsy and I head over to Target and withdraw the entire amount.  You may have noticed that she carries a bit more in several of the categories than I do; that’s because we’re usually together and it works out best for us.  I carry my own grocery money for when I have to run to the store by myself to pick up a few odds and ends.

It’s also worth noting that Capital One 360 has a $1,000 daily ATM withdrawal limit; keep that in mind if you use or plan to use Capital One 360.  Otherwise be sure your cash envelope amount fits within the daily ATM withdrawal limit of your bank.  If the amount needed exceeds the daily limit simply go to the ATM twice each month, once in the beginning of the month and once in the middle.

What tactics do you employ to avoid paying ATM fees?

Categories // Money Management Tags // banking, cash, fees, ing direct

Debit Card Fees Dropped by Big Banks

11.03.2011 by Matt Jabs //

Bank of America announced today they will abandon plans to charge a $5 monthly fee for debit card use. This comes on the heels of a similar announcement from other big banks including Wells Fargo, Chase, SunTrust, and others. Why are they backing off? Because you said no.

Why all the fuss?

Last month the Fed (Federal Reserve) – mandated via the Dodd-Frank Act – capped fees on debit card purchases to about half the previous level. This change caused many big banks to scramble for an answer to the nearly $8 billion loss in annual revenue for big banks (data per Bloomberg Government).

Their answer? Pass the loss down to the consumer in the way of monthly debit card fees.

Your response? No way! And it worked.

Now card issuers must seek other ways to replace revenue and trim costs.

How will they make up the lost revenue?

Great question… I dare you to guess.

If you lose a job and have less revenue, what do you do? There are two possible solutions: 1) earn more revenue, 2) cut costs. If big banks find different ways to pass costs down to you they better do it in a way you won’t notice – since you already rejected their last attempt and you’re on guard – OR, they’ll have to cut costs.

They could cut costs by eliminating branch offices in favor of an increased focus on online banking (like that of Capital One 360, Ally Bank, PerkStreet, or USAA). Things are moving in that direction anyway, and big banks refusing change risk a dinosaur’s fate.

They’ll most likely opt instead for a revenue stream you’re less likely to notice… which brings me to my last question.

Will you switch anyway?

Sure, the big banks did their best Mitt Romney and flip-flopped their way out of debit fee wrath… but did they lose your confidence in the process? They never had mine.

November 5th is still Bank Transfer Day – a national movement to switch from big banks to online and/or local banks and credit unions. Remember, remember the 5th of November!

I made a few recommendations, based on my experience and research, that you can take or leave. Whatever you do, just make sure you’re not staying with a bank you hate because you’re too lazy to make the switch.

****

Categories // Money Management Tags // banks, fees

Bank With No Fees [Checking and Savings]

10.25.2011 by Matt Jabs //

Bank with no fees - checking and savingsA message and a $50 bonus

I sent this info as an email to all my subscribers yesterday but – since debit card banking fees are such a hot topic right now – figured I needed to share it publicly. More on the $50 bonus in a minute.

I saw a World News special last night about how so many American’s are fed up with big banks and their new fees, specifically the $5/month fee Bank of America is charging customers for using a debit card. That is just horrible… charging us to use our own money – where will it end?

I saw the light years ago and did A LOT of research into what banks give great service with no fees. I found three solid options.

Rewards debit w/your existing account

This is a perfect option for Bank of America customers.

How can you get 2% rewards cash back on all debit purchases, and 5% on select debit purchases without having to switch banks? Simple, use PerkStreet.

Here are some of the benefits PerkStreet delivers:

  • Keep your existing bank – Sign up and link your PerkStreet account to any other bank account for free. Transfer money when you need it, always free.
  • 2% cash back on debit purchases – You’re rewarded for spending money you already have rather than using credit cards (which I’ll never recommend).
Read more about PerkStreet Financial Rewards Debit and sign up if it suits you and you’re ready for a simple debit card change.

No fee checking accounts

The banks I recommend lock, stock, and barrel are Capital One 360 and Ally Bank. They are both online banks, that also allow for paper checks if you so desire. The reason they can survive and even thrive in this economy is because they have no brick and mortar branch offices to maintain… and that savings gets passed straight down to us.

The other recommendation I have is to open an account with your local credit union as a supplemental account (or clearinghouse if you will) for your online accounts with either Capital One 360 or Ally.

Personally, Betsy and I have accounts with Capital One 360, Ally, and our local credit union, but we mostly use Capital One 360… they are simply fantastic and I recommend them in full confidence.

Read more about their checking accounts by following the links below and make the switch if you like what you see.

  • Capital One 360 checking (called Capital One 360) – A $50 bonus for all new customers.
  • Ally Bank checking

And savings accounts

If you’re looking for information on savings accounts, use these links for Capital One 360 and Ally Bank.

Let me know if you have any questions and I’ll do my best to help.

****

Categories // Money Management Tags // accounts, banking, checking, fees, Savings

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