By Joan Goldwasser
Kiplinger's Personal Finance
Sunday, May 4, 2008

ATM fees, which have been rising for the past four years, cost consumers more than $4 billion last year. That's because banks are charging more for the convenience of using the closest cash machine.

Megabanks, such as Bank of America and Chase, upped their charge to noncustomers from $1.50 or $2 to a hefty $3 per transaction in 2007. If you have an account at Bank of America but use a Chase ATM, it could cost you as much as $5, including the $2 fee BofA imposes on customers for using a machine outside its network of 18,000 ATMs.

But there's no need to pay these pesky fees. Look on the back of your ATM card for the logo that indicates which network your bank belongs to. If you use an in-network ATM, you may still pay to use that machine, but at least your bank won't charge you its out-of-network fee.

Better still, look for a local bank or credit union that participates in a network that doesn't levy surcharges and does not charge you if you withdraw cash from another bank's ATM. "Banks that don't have their own ATM networks can actually give customers equal or greater freedom by reimbursing fees or joining forces with surcharge-free alliances," said Greg McBride of Bankrate.com.

Among such surcharge-free networks are Allpoint, Co-op Financial, CU Here Premium network and Star, each of which boasts tens of thousands of ATMs nationwide. You'll find their machines in a variety of locations, including gas stations, drugstores and retailers, such as Costco, 7-Eleven and Target.

Another way to avoid ATM fees is to open an account at an Internet bank -- such as Bank of Internet, First Internet Bank of Indiana or EverBank -- that reimburses you for fees up to a specified amount, usually $6 or $7 a month. Or sign up with Metropolitan National Bank or Schwab Bank, both of which reimburse all ATM fees worldwide.

Reluctant to switch? See if your bank offers an account with free ATM transactions if you maintain a minimum balance. Or save yourself the trouble, and get some exercise, by walking a few extra blocks to your bank's nearest branch.