Cash Machines Charge £100m Fees to UK Customers
Did you know that UK cash machine charges topped £100m in 2019? This is an all-time record high and Selectra looks at why this is happening. Keep reading to find out how you can avoid these bank fees and save money.
Why are cash machines charging more for withdrawals?
Once upon a time, not all that long ago, it was easy to get a cash withdrawal from ATMs at UK banks without being charged. In recent years, this has started to shift in favour of banks and away from customers. You have probably noticed this and we’ll explain why.
1. Free cashpoints are disappearing
That’s right, the number of cash machines where you can make a free cash withdrawal is declining rapidly. According to Which?, the consumer choice brand and advocate, in the past couple of years alone 8,700 free ATMs have closed.
This means people are being forced to use fee-charging ATMs. Not surprisingly, this number is increasing and now account for 25% of cash machines. To add insult to injury, there are 130 postcodes that cannot access a cash machine at all now.
2. UK banks are cutting costs
Many UK banks are paying the companies that run ATMs less than before. In response, the ATM providers are increasing the fees to cover these shortfalls.
In short, this is why customers are drawing the short end of the stick and footing the bill. Before you despair, there are a number of solutions to help you budget and cut down on cash withdrawals, allowing you to spend your money on better things.
How to stop paying UK banks for your cash withdrawals
To stop paying banks these cash withdrawal fees, you need to know how to avoid ATMs with fees. You will need both awareness and discipline as well as a willingness to look into new technology.
If you think your hard-earned money is better off with you than with UK banks, we’ll show you how to reduce the number of cash withdrawals you make. Not only that but we have some great budgeting tips so you can save even more money. Most require minimal effort for maximum gain.
1. Avoid making cash withdrawals by using a budgeting app
There are numerous budgeting apps available. Many of these are free and others you need to pay for. Some are stand-alone apps that work by accessing your card details and tracking your spending, while others are offered directly by banks, most notably digital banks.
How can these apps help you avoid using ATMs? They will consolidate your spending habits so you can see how much cash you withdraw and at what periods throughout the month. You may notice that some of your larger cash withdrawals are for products or services you could pay for online.
For example, if you regularly treat yourself to an end-of-month shopping trip but like to get cash out to know how much you’re spending, your app could do this for you. That way you can still track what you’re spending and not go over your budget and pay by card. If you’re still set on getting cash out, you can find out when you need it most and take out a lump sum so it reduces the number of times you use an ATM.
2. Some UK banks even charge for cash withdrawals at ‘free ATMs’
Does your bank account charge you for making cash withdrawals at ‘free ATMs’? If the answer is yes, you may want to consider switching providers. You can easily switch UK banks: just choose your new one and contact them. There will be a couple of forms to fill out but then they arrange the rest. Your new account will be up and running in seven or more business days.
There are many UK banks that offer free cash withdrawals. For example, a thinkmoney current account will not charge you for making cash withdrawals at free ATMs in the UK. You can also take cash out at any post office branch for free.
Bear in mind there is a monthly account fee of £10 for an individual account and £15 for a joint account.
3. Get a pre-paid debit card with Revolut
Open an online account with Revolut, then you can add money to your Revolut card. You will get free cash withdrawals up to a certain limit each month. Plus, you can assign a weekly budget to spend in-store and online. You can track your spending from the Revolut analytics screen on your smartphone.
Read more about its innovative services in our dedicated Revolut guide. Sneak peek - you can split payments, enjoy no fees in 150 countries and even exchange cryptocurrencies!
A banking revolution has been shaking the marketplace for the last few years. Most of this is being led by online financial providers who are trying to disrupt the status quo for the better.
It’s great news for customers because there is more choice and more competition, which drives prices down and promotes creativity. So, jump on board this new wave and shop around. We are already great at doing this with utility companies but need to keep our financial friends on their toes too.
The products reviewed in this article represent only a small selection of the options available to you. Selectra always recommends that you carry out your own research and seek legal advice if necessary before making any decisions.
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