Automated Teller Machines can break your bank account if misused. Via Shutterstock.
I am middle aged and have never used an ATM. Never wanted to, never felt the need to hit the magic machine that, for a few coded numbers, will hand me my hard-earned money any time I want it. I’m not bashing bank technology; there are times when those extra dollars at two in the morning was necessary, and a credit or debit card was not going to help. So why have I not taken the plunge and signed up with my bank for 24/7 access to my own money?
Here’s why I avoid ATMs like the plague.
ATM stands for Automated Teller Machine, but I also think it stands for All That Money. As in, All That Money is Available, it’s There and it’s Mine.
Here is why I avoid ATMS – and maybe you should too.
- Sometimes too easy access equals too easy spending. It’s simple to drive up, withdraw the cash, and go on your merry way, without remembering to subtract the amount from your account. And keep doing it, until the day you’re overdrawn.
- Fees add up, especially if you hit ATMs out of your bank’s network. These are called “cheating fees,” and they cost you anywhere from forty-five cents up to five dollars. U.S. consumers had six billion ATM transactions in 2009 alone (the most recent year for which statistics are available), according to a 2012 report from the U.S. General Accounting Office. Banks have this information, realize it’s a source of revenue, and keep charging.
- But on a basic, everyday level: chronic use of the ATM may be a signal that your budgeting and money-saving methods need an overhaul.
How do you keep ATMs runs reasonable?
- Learn to budget realistically. We all want to save, but it’s like a too-strict diet. If you put too much money in the bank, and don’t leave yourself enough spending money until your next paycheck, you keep running to the bank “fridge” for a little bit of a money “snack” to tide you over. Pay yourself for the week, and divide your money into envelopes, with each labeled according to need and keep one envelope for wants. If you give yourself the treat at the start, you’ll be less likely to sneak out more money later.
- Know your bank: what other banks and ATMs are in their network? What are the fees? Is there a minimum amount you must have in your account in order to access free ATM service? If you don’t know the fees your bank charges, look at your statements. If you cannot figure it out, call the bank. If you cannot get a straight answer, find another bank.
- If you travel abroad, check with your bank to find out what ATM services are available in the places you visit. Foreign ATM fees are typically a flat rate, usually from $1 to $6. You tend to spend more on vacation because it is vacation, which often means more trips to the machine.
- Instead of doing the ATM dash, learn to use a credit card wisely, especially a reward card, which pays you back in cash or points you use for consumer goods, hotel stays, car rentals or airline tickets. Using a credit card – and paying the balance off in full, every month – is not only safer than a 2 a.m. trip to the ATM, it gives you a record of what you spend.
A prepaid debit card may help curb spending more than ATM access.
- Consider using a prepaid debit card, loaded with a set amount of cash, for your wants and splurges. Instead of accessing the ATM, you can pull out the card, pay for your purchase and track your balance online using your computer or smartphone. When you fun money’s gone, you have to wait until your next paycheck.
- Some debit card issuers, such as Green Dot, even offer a smartphone app that lets you know when the card balance is low. The card can be tied to your checking account, and you decide how and when to add money to the card. It’s safer than carrying a lot of cash, and knowing exactly what’s on the card can keep those fees out of the bank’s hands and in your wallet.
Welcome to Bargain Babe! I’m Mara, and I’m so glad you’re here. I am an obsessive bargain hunter and penny pincher, and I am determined to live a full life without EVER paying full price.
I like the way you’re thinking. I’d always go with responsible ATM card use over a prepaid card. Knowing your bank is crucial.
If you can’t get fee-free withdrawals near where you live, work and travel– switch banks.
@Mortgage Free Mike I agree! Whether you use the ATM frequently or never at all, keep track of the fees and create habits that reduce or eliminate fees all together. My bank does not have ATMs so it reimburses me for all ATM fees I pay. I try to only withdraw $100 cash once a month, then put everything else on my credit card.
I usually go into the bank branch because it’s saver, climate controlled and you help bank tellers keep their jobs. It is also more personal and everybody at my local branch knows me – it’s like going to Cheers. I know where local branches of my bank are located so that I don’t have to use or go outside of my bank’s network. I also look up locations in areas where I will be travelling and it has come in handy as I tended to spend more cash when going to fairs and attractions.
If you have to use an ATM, the transaction fees are the same if you take out $20 or $200 so it does become cheaper (by percentage) to make one larger withdrawal as opposed to 2 smaller ones.
My preferred method of payment is using a credit card with rewards which is paid off at the end of every month.
Good point about the transaction fees, Myke, but the issue for some people who don’t plan their budgets well is that they make multiple trips and take out money several times a week. One planned trip, whether it’s for $20 or $200, isn’t a budget-breaker. My point is that for some people, including myself, having all that access is too much temptation. Even though I budget better now than I did when I was stupid broke, I still avoid the cash machine, so I don’t start that downhill slide.
I have never used an ATM card or ATM machine in my entire life either. The very idea of easy access to your money fosters poor financial planning and total lack of discipline. And, just like you mentioned in your post, I hated the idea of being charged a convenience fee from both my bank and a foreign bank for the privilege of accessing MY money. No thank you. Buying all good and services with a cash rewards credit card and paying the entire bill by the grace period due date in order to avoid any accrued interest is a smarter way to save money. The key is you MUST pay off the entire balance each month. Buying something on sale isn’t a sale if you’re paying off high interest charges. You must be ever vigilent and never waiver from this. Besides, if you stop and think just exactly how disgustingly filthy handling cash is when you consider where people put it. Many people do not wash their hands after using the restroom. Whatever might be on their hands will get transferred to the cash they handle and pass it onto you. One final thought. Using an ATM machine makes you a target of opportunity for thieves looking for an easy mark.
@The Unethical Man Of course you don’t! I should have known. (Or maybe you told me and I forgot, very possible.) Like you, I try to put as much as possible on my credit card. I like knowing how much I’ve spent and WHERE I’ve spent it. Great for analysis. A wise CPA once told me if you don’t know where the holes are you can’t start to plug them.
I find the ATM to be easy and convenient. It’s money I’ve earned and money I withdraw AS NEEDED. I do not splurge or spend recklessly. I can use any ATM, and my bank reimburses me any charges. Like Myke Sobel, my preferred method of payment is a credit card with rewards. I prefer cash rewards and also pay off the card monthly in full. But there are times when I need or prefer to pay in cash, e.g., when there is a fee to use a credit card.
@The Unethical Man ~ How do you handle the money (paper and coins) in your wallet or when receiving change from, say, the grocery store? Our bodies can resist a lot of invaders. If you’re that concerned, you can carry a bottle of hand sanitizer and use it immediately after an ATM visit or reading the menu at a restaurant or shaking hands with someone or . . .
I’d have to say both ATMs and cash share a certain level of contamination. There was a story on CNN about drug-tainted money, and how much of it was circulating in this country, (http://edition.cnn.com/2009/HEALTH/08/14/cocaine.traces.money/). But germs and bacteria can live anywhere, on almost any surface, including the cash-back credit card I love! A package of antibacterial wipes or a vial of antibacterial gel is easy enough to carry around.
That’s the key, Diane. Money AS NEEDED. It’s still difficult to get some adults to understand the difference between wants and needs. I’m amazed at how many people in my age group still think of a $40,000 car as a need.
Instead of just thinking of an ATM as a way of getting money, it can also be used to make DEPOSITS. I would use it to deposit cash, but can be used safely to deposit checks.
@Chris Good point. An ATM card is for the deposits as much as it is for the withdrawals.
I agree with this..I don’t have an ATM card and never have. Fees/$$$ to easily accessible. I go to my branch, close by if I need too. BTW I don’t use a debit card not planning on getting one…and I’ve been okay for all these years. I bought a prepaid card when I went to Europe, but other than that, I don’t see the point.
@Di So what do you do when you need cash? I can’t imagine you take cash advances on your credit card?!
Di isn’t the only debit card-free person. I stopped using one as well. No really good reason – just easier not to have one more piece of plastic in my wallet.
@Nancy SO how many pieces of plastic DO you have in your wallet? I’d like to lighten mine, but I seem to always carry a gift card or two, my gym membership, plus an ATM card and two credit cards, plus my ID and my HSA card. What’s in your wallet?
I just counted. One gas card, two credit cards (only one of which I regularly use), two store cards (which I have not used in forever) and my HSA card for medical emergencies. That’s it.
As for other non-financial plastic: driver’s license and medical group ID. My voter’s registration and auto insurance are paper (I guess I won’t count those). 🙂 It is remarkable how little I actually carry, compared to maybe 20 years ago. And my mother had so much plastic, she had a separate carrying case, besides her wallet!
Nice post. I’m no fan of the ATM but we rely on cash in our family because it prevents frivolous debit card spending which defeats the purpose of avoiding the ATM. Additionally, cash back at the register, which is ATM by other means can rob you blind! We only use ATM for specific transactions like paying for school lunches or field trips.
Morris, thanks for the comment. I like your thinking, and your determination to use cash. It’s not easy in a plastic-centered world.
I’m 34 and I never use ATMs. I typically use a rewards credit card and pay it off every single month. At least then I can see where my money is going, and no fees, and putting 50 transactions a month with a debit card is just going to be too confusing. My sole income is selling things online and a lot of my big finds are at garage sales, and those typically only take cash. Not having $40 in hand might be a missed opportunity of $300. I find its easier to go to the bank once a month, withdraw $500 in smaller bills (garage sales are notorious for not having change), and when it gets low, get another $500 out. I don’t think I used an ATM in 7-8 years, and probably only used one about 40 times in my life (when I was in college, my bank was 200 miles away). I’m actually a bit surprised with people that don’t carry *any* cash. I mean even like $10. What if you get hungry? Need something to drink? Need to catch a bus home?
There’s other reasons not to use them if you don’t have to. ATMs are machines, and machines do fail. I’ve had my balance deducted, but did not receive the cash due to machine malfunction. You’re supposedly covered by Regulation E of the EFTA of 1979.but it still takes time for you to recover your hard earned funds, and you feel like you now have to prove to the bank that you didn’t get the funds even though you did nothing wrong. Another reason is that criminals hang out near ATMs. I’ve lost a friend to an ATM-related murder, and have read more than enough incidents of fraud surrounding it. I used to use it,but now I rather stand in line.