The One Very Expensive Mistake You're Making At The ATM

We know the feeling: It's 6 p.m. and you and your coworkers are out for some beers. When you get to the cash-only bar, you realize you're all out of money and resort to using the bar's ATM. You tell yourself that, next time, you'll definitely be sure to withdraw cash at your own bank before going to the bar, to avoid paying lousy out-of-network ATM fees.

Stop doing this. You are just throwing away money. And that's a pretty silly thing to do.

Taking cash from an out-of-network ATM is a ridiculously expensive habit these days. According to a new survey from the financial services company Bankrate, the average cost of going to an ATM out of your network is $4.35 per transaction. That's probably a lot more than you thought you were paying.

The trouble is that when you go to an out-of-network ATM, you are often charged two fees: one to use the ATM and one by your bank penalizing you for not using one of its own ATMs.

My bank reimburses me for using out-of-network ATMs, but many other people regularly pay exorbitant ATM fees. According to an earlier Bankrate survey, 30 percent of ATM withdrawals are from out-of-network ATMs.

I reached out to some Twitter followers to find out why they resort to such a wasteful habit.

Here's what some friends and coworkers had to say:

@emily_cohn no bofa branches in williamsburg

— Matthew Zeitlin (@MattZeitlin) September 26, 2014

None of these excuses are OK. Here are some tips to avoid paying out-of-network ATM fees.

Switch to a bank that's more convenient. Don't make it difficult to get cash. Convenience can save you a lot of money.

Switch to a bank that reimburses you for out-of-network ATM fees. These do exist! Check out Ally Bank or Schwab, for example.

Get cash back when you go to the grocery store. It's cheaper to go to a grocery store, buy a bottle of water for $1 and get cash back for no fee, than it is to go to an out-of-network ATM that'll cost you upwards of $4 (also, in the first scenario, you leave with a bottle of water). Try it sometime!

Borrow from friends and pay them back using Venmo. If you're out with friends and in need of cash, ask a friend to spot you some money and instantly pay it back electronically using an app like Venmo, which is free to use and lets you send money to your friends.