ABCs of ATMs

ATMs can be found all over the globe. They make cash available 24 hours a day, seven days a week. In addition to withdrawing money, you can check account balances, transfer money between accounts or deposit funds into an account. As technology advances, you’ll see automated teller machines featuring a wider array of functions such as online bill payment.

Open a checking account and you’ll be given an ATM card so you can siphon money out of your account without writing a check or using a teller. For decades, the cards could be used only at ATMs. But in recent years they’ve been given another function, a debit feature, so you can also use the card to pay for purchases.

As a debit card it will have a Visa or MasterCard logo and can be used anywhere Visa or MasterCard is accepted. Unlike a credit card, where you pay for your purchases once a month when you receive a statement, purchases paid for with a debit card are deducted directly from your checking account. We’ll delve into debit cards later in this chapter.

ATMs provide convenience, and convenience almost always has a price tag. Fees are the price you pay for using an ATM that’s convenient but doesn’t belong to your bank. You can avoid having fees drain your account by planning ahead.

If you have an account with Bank of America, you may never need to look very far for an ATM owned by Bank of America. But if a community bank, or even a regional bank, is more your style, you won’t find one of their ATMs on every other corner. Try to withdraw enough money from your paycheck to last until the next payday. If you are running low, make an effort to stop at your bank’s ATM to refuel your wallet — before you really need the cash.

It’s rare, but ATMs do malfunction from time to time. The article “When ATMs malfunction” can be useful if the ATM eats your card.

One caveat, where there is money, there are criminals. Bankrate’s article, ” Skimming the cash right out of your account,” can help you avoid phony ATMs. Also, read ” 10 consumer tips for ATM safety and security,” to avoid potentially dangerous situations.

In the next section we’ll examine the fees that plague so many ATM users.

Top 10 ATM owners, 2004-2005(1)

Rank Owner No. owned in 2004 No. owned in 2005
1 Bank of America 14,000 16,000
2 Cardtronics 4,500 9,480
3 U.S. Bancorp 6,503 6,780
4 J.P. Morgan Chase & Co. 6,303 6,650(2)
5 Wells Fargo 6,184 6,251
6 7-Eleven 5,400 5,341
7 Wachovia 4,408 4,412
8 PNC 3,624 3,644
9 Washington Mutual 2,990 3,350
10 Citibank 2,700 2,811
Source: ATM & Debit News. (1) January data. (2) Includes Bank One ATMs.