(My apologies if this was covered elsewhere. I did a search on “ATM”, and it responded that the word was too short. Then I searched on “ATM fees” - with the quotes - and all I got was threads about “fees”.)
I keep hearing ads for banks who will not only let you use their ATMs for free, but they’ll even reimburse the fees that other ATMs charge. Some seem to limit this to bank-run ATMs, but others seem to explicitly include any ATM, even the privately-owned ones in the convenience store that seem to charge more than average.
In other words: I use my card to get $100 from the machine. The machine warns me that it will charge me a $5 transaction fee. I say okay. The machine pulls $105 from my account, gives me $100 of it, and keeps $5 for its owners. Then, at the end of the month, my bank puts $5 back into my account to reimburse me for the transaction fee.
Why would my bank do that? Where’s the profit for them? I understand that my bank has a lot of customers, and this is certainly a good way to attract new customers, but many of the ads for this service claim that they’ll do this even without me having to maintain a minimum balance in my account. Under such conditions, I could easily use this service a dozen times a month, and rack up $50 in charges. In fact one such commercial says “You can save $200 a year in fees – or even more!” How can the bank afford to do that?
It sure sounds to me like a great example of “If it sounds too good to be true, it probably is.” Except that I have not heard any complaints against this practice. Where’s the catch?
The only explanation I can think of is this: By advertising “no minimum balance”, they hope to attract customers who tend to have close to nothing in their account, and then the bank will be able to charge $30 for each overdraft. Am I close?