ATM cards are causing a cash addiction

When was the last time you used your ATM card?

If you are an average bank customer, you won’t have a hard time remembering.

In fact, consumers value their automatic teller machine cards more than they do their computer, newspaper or cable television, according to a study commissioned by the PULSE EFT Association, one of the largest electronic funds transfer systems.

Using ATM cards to make purchases debited from their checking accounts ranked second only to the home telephone as the most valued consumer convenience, according to the survey.

There’s no question that if you are in a bind and need a bit of cash, having access to an ATM is a good thing. However, the ability to withdraw money at all hours of the day or night can also encourage undisciplined spending.

The PULSE survey and other reports about ATM usage offer proof that we have become a nation with an addiction to quick access to cash.

How many times have you been out on a Saturday and suddenly discovered that you are running low on money halfway through your errands? No problem. Just whip out that ATM card and withdraw $20 for a movie, a quick purchase at the mall or a milkshake and burger.

Star Systems, an electronic payment network, found that one out of five ATM/debit card transactions it processed last year took place on a Saturday. The company reported that all-electronic payment transactions on its systems rose 17.4 percent last year to 2.94 billion — 896 million transactions through automatic teller machines and more than 2 billion debit transactions.

An increasing number of consumers are using their debit cards to make purchases rather than using cash, checks or a credit card. In the PULSE survey, 67.6 percent of purchases were made with a debit card. In 1993, just 20 percent of those surveyed said they relied on debit cards.

Retail locations with ATMs on the premises see their sales increase, according to the ATM Connection, which sells automatic teller machines. Nightclubs, for instance, can expect to see 70 to 80 percent of the dispensed cash. ATM Connection contends that cash retention among large retailers is more than 30 percent.

Just think about the fees so many people are willing to pay to withdraw money from the now ubiquitous ATMs.

More than 65 percent of bank customers surveyed by PULSE said they had used an ATM at a financial institution other than their own to withdraw cash.

The average fees charged by big banks for their own customers to use other banks’ ATMs increased from $1.27 per transaction in 1999 to $1.49 this year, according to a bank fee survey by U.S. Public Interest Research Group.

Since 1996, ATM fees have nearly tripled. Whereas customers usually were assessed a $1 fee for using an ATM, they now pay an average of $2.86—with one fee going to their bank and another to the owner of the ATM. In larger cities, those fees sometimes jump to as high as $4.50 a transaction—even if you withdraw as little as $20.

"People are living from $20 to $20," said Ed Mierzwinski, consumer advocate for U.S. PIRG, the national lobbying arm of the State Public Interest Research Groups. "This is a big problem, because it means people are paying high fees to use ATMs and are not keeping track of those fees or what they are spending the money on."

Take a look in your wallet or purse. Is it stuffed with ATM receipts? If so, you can stop wondering where all your money is going. It’s going into an abyss of purchases that you can’t even remember a week later.

Want some control of your cash-flow problem? Schedule your ATM trips. Withdraw what you actually need for the week and make it last. Then tuck that card away.

Try this for a month and I bet you will stop wondering why you are always broke. You will have more money because you will have beaten your addiction to fast cash.

(c) Washington Post Writers Group

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