Posted by Mike Smith :: August 9, 2007 @ 7:35 am

The proliferation of Automatic Teller Machines (ATMs) has been instrumental in forming my philosophy towards banking. With the combined use of online banking and ATMs, there’s hardly any reason to ever enter a bank. While they do contribute to that freedom to avoid banking in person, there are some common ATM mistakes that you should try to avoid.

PIN Problems

PIN numbers are typically assigned by the bank when a card is issued and can then be changed when you activate the card. When choosing a PIN, you should pick something that is easy to remember, but difficult for someone to guess.

Do not use common numbers such as your birthday or phone number. Remember that most ATM machines have letters on each key, similar to a telephone. It may be easier to remember a word instead of a number.

Once you’ve chosen your PIN, keep it secure. Try to never write it down. If you do need to write it down, store it separately from your card. If someone ever stole your wallet or purse, finding your ATM card and your PIN would be a dangerous combination.

Fees

Most banks will charge non-customers a fee for withdrawing cash from their ATMs. Similarly, some banks will charge customers a fee if they use ATMs owned by other banks. Be sure you understand how the fees work with your bank.

If you consistently find yourself paying fees, it might be worth considering an alternative bank. Some banks won’t charge you to use other bank’s ATMs and will even reimburse any fees that other banks charge you for using their ATMs. You’ll have to consider the trade-offs between ATM fees and other services offered by the bank.

If you are forced to use an ATM that will charge you a fee, try to take out as much cash as you’ll need until your next visit to a no-fee ATM. Paying a fee is bad enough. It becomes unacceptable when you pay repeatedly for small withdrawals.

An ATM Card is not a Credit Card, and Vice Versa

Just because your ATM card has a logo of a credit card company on it doesn’t mean it’s a credit card. Realize that if your ATM card is lost or stolen and used by someone, your money is removed from your account very quickly. You need to think of purchases with your ATM card as cash withdrawals.

While the liability for fraudulent use of your credit card is $50, your liability for fraudulent use of your ATM card depends on how quickly you report your card lost or stolen. Always report a lost or stolen card immediately. Also, be sure to vigilantly check your monthly statement for any unauthorized use.

I save my receipts and compare the amount of each transaction with the amount reported on my monthly bank statement. If you find any discrepancies in your statement, report them immediately as well. Failure to report such charges within 60 days of receiving a statement makes you liable for the charges.

Just as there are reasons why you shouldn’t treat an ATM card like a credit card, the opposite is also true. Most credit cards allow you to withdraw cash from an ATM. Don’t do it!

Cash advances tend to carry the highest interest rate for your card. While there have been many posts explaining how a P2P loan from Lending Club can save you considerable amounts of money compared to credit cards, those comparisons are typically between a loan and the normal interest rate of a credit card. Cash advance rates can be much higher. If you need cash and are considering a credit card advance, a loan from Lending Club can be a much less expensive way to borrow.