The acronym ATM stands for automated
teller machine. ATMs have become an integral part of our lives
and have existed since the mid-1960s. According to MSNBC Technology
Correspondent Bob Sullivan, there are approximately 370,000 ATMs
across the United States or 1 for every 296 people. That may be
too many according to a recent study by the Dove Consulting Group.
Tony Hayes, author of the Dove Group report, stated that as
many as 50,000 ATMs may disappear during the next three years
if something is not done to rectify this problem. ATM locations
make a difference in how they are used and the best locations
are gone. Hayes further stated that running an ATM costs roughly
$1,000-1,500 per month. Even if fees are at the high end, $2 per
withdrawals is insufficient.
In the 1960s, the primary purpose of the ATM was to provide
cash. However, today you can go to your bank's ATM to make a deposit
or loan payment, to transfer funds between accounts, or to check
your account balance. ATMs are used to obtain money from anywhere
in the world. To carry a debit card means you can carry less cash
on your person, which guards against money being lost or stolen.
Some ATMs will even allow you to buy postage stamps or add money
to a prepaid cellular phone service. Although ATMs are common
and helpful, people are reluctant to use them because of the misinformation
associated with using ATMs. ATMs in the United States handle more
than 10 billion transactions a year and the vast majority of the
time transactions occur without glitches. Nevertheless, there
are times when ATM users encounter problems.
The use of ATMs makes it convenient for shoppers in the marketplace,
yet it can be costly. For example, withdrawing cash from another
ATM outside your bank's network may require you to pay a fee ranging
from $1.00 to $4.00 per transaction. Such fees may seem small
but they add up over time. To avoid paying ATM fees, use your
own bank's machines whenever possible. Virtually all banks offer
accounts with free ATM transactions to their own customer. However,
some financial institutions do have accounts that charge their
own customers an ATM fee. Therefore, it would be wise to look
carefully at the accounts that are available and choose the one
that meets your needs. For example, choose an account that allows
free withdrawals from an institution with numerous locations.
However, in the event your bank charges an ATM fee, it will probably
be less than ATM fees at other banks. Your bank may be able to
provide you a listing of banks that will not charge you a fee,
or you can find this information on the Internet.
In addition, if you must use another ATM, become familiar with
your own bank's fee for using another institution's ATM. Some
banks have agreements not to charge ATM fees to each other's customers.
Keep in mind that if you are unable to use a surcharge-free ATM,
you could incur two charges---one from the ATM owner and one from
your own institution. Federal law requires that ATMs caution non-customers
about surcharges before completing a transaction.
Consumers can save time and gas by withdrawing larger sums
of money. For example, make a single $100 or $200 ATM withdrawal
instead of several $ 20 or $40 withdrawals. You can also save
time and energy by getting cash back free when you use your debit
card to make purchases at the grocery store or other businesses.
Some stores will also cash a check free of charge or charge a
fee that would be less than what you will pay at an ATM.
Consumers should also be aware of possible bank overdraft fees
when using an ATM card. It is wise to record debit card transactions
in your checkbook or another record keeping tool. You cannot always
rely on the receipt received from the ATM. This balance may not
reflect the checks you have written that have not been paid yet,
or debit transactions that have not been posted to your account.
Under the Electronic Fund Transfer Act (EFTA) there are laws
protecting ATM users.
In summary, with an ATM (debit) card, you buy now and pay now.
There are no interest charges. Using a debit card is easier and
faster than writing a check. It helps you to avoid debt problems.
Like credit cards, banking institutions with debit cards are beginning
to offer free services to its patrons and some purchase protections.
But remember, debit cards have fees on certain transactions and
it's important to record all debit card transactions.
Sullivan, B. (2004). Are there too many ATMs? MSNBC
News. Retrieved September 27, 2004, from http://www.msnbc.msn.com/id/5529813/.
Federal Deposit Insurance Corporation. (Fall 2002). Playing
your cards right: Smart ways to use credit and debit cards. FDIC
Consumer News. Retrieved September 27, 2004, from http://www.fdic.gov/consumers/consumer/news/cnfall02/cvrstry.html.