When you're far from home and in need of cash, nothing beats an ATM. You can check your account balance, transfer funds or withdraw $300 just by pressing a few buttons.
But convenience isn't free. Customers who use "foreign" ATMs -- machines that their bank does not own -- may be charged $2 or more for each transaction.
That may sound like small change. Still, vacationers who plan to visit automated teller machines instead of traveling with cash may have to budget extra for all the fees that will appear on their next bank statement.
Anyone with an ATM card should be aware of the range of fees charged by banks. Those fees can vary according to the type of ATM used, the type of transaction and even the
amount of money in the account.
Most banks, for example, do not charge their customers to use their own ATM machines. But policies for foreign ATM use vary widely.
* Maryland National Bank charges $1.50 for any transaction -- a withdrawal or account inquiry -- on a foreign ATM.
* At Provident Bank in Baltimore, the first three transactions at a foreign ATM in a month are free -- as long as they are made through an ATM bearing the Most sign. Subsequent transactions that month cost $1 each.
* At Bank of Baltimore, customers who use foreign ATMs are charged $1 for withdrawals and 75 cents for balance inquiries or transfers.
* Other banks charge various fees for using a foreign ATM, depending on the type of transaction and where it is made. Charges of 35 cents to $2 are common.
Such fees are a marked change from the early days of ATMs. In fact, when ATMs were new and seemed slightly threatening to customers, a few banks even paid their clients to use them. Bank of America in California, for example, deducted $1 from the monthly account service charge if a customer used one of its automated teller machines in the late '70s and early '80s.
Maryland Bank Commissioner Margie Muller says that when banks introduced the machines, they anticipated saving money and wanted to entice customers to use them. The big savings never materialized.
"There haven't been the expense savings to the degree the banks expected," Ms. Muller said. "The machines are costly to install, they carry expenses to maintain, and for years they required a lot of trouble-shooting.
"For a long time, people did not use them in large enough numbers to make them cost-effective. They did not replace tellers or reduce the need to expand teller functions."
So banks have added fees.
Now, says John Hall, a spokesmanfor the American Bankers Association in Washington, there are more than 75,000 ATM locations worldwide. In 1989, the last year for which statistics are available from the ABA, banks distributed 138 million ATM cards, an average of 1.5 cards per U.S. household.
Mr. Hall adds that the average transaction at an ATM costs the average bank $1.10, a little less than the $1.28 cost for the same transaction with a live teller.
"People who are machine users probably use them more often [than they would have used live tellers] because they are so convenient," says Ms. Muller. The result, she says, is no real savings for banks.
The ATM fees are necessary, she says, because banks have to pay the foreign institutions for performing their services.
"What banks are doing is passing on that additional expense, simply because they have to pay it," she says.
Debbie Cleaver, a Provident Bank delivery systems manager, says that banks with ATMs are usually members of two networks: a regional network, such as Most, and a national network, such as Cirrus or Plus System.
If you use an ATM that belongs to your bank, you usually won't have to pay a surcharge, even though the bank is charged by the ATM network.
If you use a machine from one of the regional networks, expect to pay a fee for each transaction. If you are far from home and use a machine from a national network, such as Cirrus or Plus System, the fee may be even higher.
Jeanette Grezac, a spokeswoman for the Bank of Baltimore, suggests that people who never want to see ATM surcharges on their statements should never use a foreign ATM. That isn't always possible, especially when you're traveling and find yourself short of cash.
But if you keep a certain balance in your account, you might escape paying the foreign ATM fee entirely. At Bank of Baltimore, for instance, "Advantage" account customers have free use of any foreign ATM as long as they have a $5,000 balance or pay an $8 a month service charge.
To find out exactly what you'll pay for using a foreign ATM, read your monthly bank statement and any other notices you get about your ATM privileges.
Free or not, ATMs offer peace of mind in unfamiliar places.
"I was in California, put my husband on one flight to come home, I was on another waiting at the airport, and I realized I didn't have any money with me," recalls Mrs. Cleaver. "I went to the ATM and got $60 just so I would be comfortable."
She's lucky she did, because when she arrived at Baltimore-Washington International Airport, her car wasn't in the spot where she thought her husband had left it. "I needed that money to have someone help me find the car," she says.
Bank customers made 5.2 billion ATM transactions in 1989, almost twice as many as they made just five years earlier, Mr. Hall said.