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5 ways to avoid ATM fees right now

Whether Ottawa curbs ATM banking fees or not, a little planning and patience can help you avoid those charges all on your own.
Whether Ottawa curbs ATM banking fees or not, a little planning and patience can help you avoid those charges all on your own. David Ryder/Getty Images

Parliament finds itself bickering over ATM transaction fees this week as the NDP hammers away at the Conservatives to make good on a pledge to address the annoying and expensive costs on consumers.

New Democrats want a cap of 50 cents on the cut that banks and credit unions take when a customer uses an ATM terminal not associated with their bank to access their account.

READ MORE: NDP Calls on Tories to cap ATM fees

The Canadian Bankers Association says only about a quarter of ATM transactions are by customers using another bank or ATM operator’s terminals.

But with charges amounting to as much as $4, the costs are adding up. And with fewer bank branches and terminals in urban areas – especially low-income corners of big cities – those ATM charges fall disproportionately on poorer Canadians, the NDP charges.

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Whether the Conservatives heed the NDP’s calls and address the matter in this month’s budget announcement isn’t clear. But what is are some basic steps anyone of us can take right now to avoid such charges.

1. TAKE MORE CASH AT ONCE

A fixed fee of between $3 and $4 on ATM transactions means that you get a bigger bang for your buck if the withdrawal is for, say, $80 rather than $20 – which works out to a percentage of 3.75 per cent compared to a far heftier 15 per cent paid to the bank and transaction processing companies.

2. USE CREDIT

Running up credit cards isn’t the soundest of financial strategies (though Canadians have grown pretty comfortable with it). But responsible use of credit cards to pay for day-to-day things is an effective way to avoid charges at ATM machines. And you can rack up loyalty program points in the process.

Just remember to pay off the charges quickly, or your interest charges could easily outpace the fees you may have paid on transaction costs.

3. DONT USE TERMINALS NOT OWNED BY YOUR BANK

Perhaps the most common-sense tip is to simply skip using ATM machines not owned by your bank altogether. It may not be the most convenient solution you want to hear, but it is the most effective.

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There are some reciprocal agreements between institutions that let customers use ATMs without a penalty, like the one between CIBC and PC Financial, but they aren’t commonplace.

4. CASH BACK

Many retailers, such as supermarket chains, offer the option to withdraw cash when making a purchase at no additional charge to you. The amount is often capped at $80 or $100, but nevertheless, take advantage of it.

5. SHOP AROUND FOR BANK ACCOUNTS

Many bank account products offer some protections on racking up high ATM fees. Some won’t charge you for a certain number of ATM transactions per month, for example.

It will require some shopping around, however, while most will likely find that planning ahead and avoiding ATMs not owned by their own bank the best ways to not get dinged.