The popularity of ATMs (ATMs) and debit cards is increasing. ATM cards have a longer history than debit cards, but the National Consumers League estimates that two-thirds of US households are likely to have debit cards by the end of 2000. Debit cards are expected to rival cash and checks as a form of payment. In the future, "smart cards" with embedded computer chips can replace ATM, debit, and credit cards. Single-use smart cards can be used for one purpose, such as making a phone call or traveling by public transport. The smart card keeps track of how much value is left on your card. Other smart cards have multiple functions: they serve as ATM card, debit card, credit card and electronic card. While this Study Guide will not discuss smart cards, they are on the horizon. Future consumers who understand how to select and use ATMs and debit cards will know how to evaluate the features and costs of smart cards.
Electronic banking transactions are now part of the US landscape. ATM cards and debit cards play an important role in these transactions. While ATM cards allow us to withdraw cash to meet our needs, debit cards allow us to divert cash usage from point of sale (POS) purchases. Debit cards can also be used to withdraw cash from ATMs. Both types of plastic cards are linked to a basic transaction account, be it a checking account or a savings account. Some consumers confuse a debit card with a credit card, especially when the Visa or Master Card logo appears on the card. Although they look like credit cards, debit cards or ATM cards have nothing to do with credit. When you use a debit card, you are using your own money from your own checking account or savings account. The word "debt" means "subtract." Each time you use your debit card, the amount of your purchase or withdrawal is subtracted from your checking or savings account. Another way of thinking about the difference between a credit card and a debit card is that credit cards allow you to "pay later"; with debit cards, you "pay now". When you buy something with a credit card, you receive a statement that lists all your charges and you are required to pay your bill by a certain date to avoid additional charges. If you do not pay your full balance each month, you will be charged interest plus any other applicable fees. The most popular use of ATM / debit cards is to withdraw cash from an ATM. But debit cards are widely accepted in grocery stores, gas stations, restaurants and retail stores. They offer a convenient alternative to carry cash or carry a checkbook.
ATM machines have become our personal bankers. They allow us to access our funds 24 hours a day, 7 days a week, 7 days a week. All we need is an ATM card and a personal identification number (PIN). Some ATMs allow us to make deposits, verify account balances, get cash and transfer money. Other ATMs only offer cash and are commonly found in high traffic areas such as convenience stores, movie theaters and hotels. Using your ATM cards at these locations often has high transaction fees. The rates and surcharges associated with the use of ATMs have drawn national attention. Consumer groups are serving as "watchers" for surcharges trends, and Congress has held hearings. The main problem is that ATM surcharges are not adequately revealed to consumers. If consumers know they can be charged $ 3.00 to withdraw $ 10.00, they could make a different decision. National ATM networks and most regional networks require ATM surcharges to be disclosed by a notice that appears on the ATM screen and by a sign at or near the ATM itself, but studies have shown that information is not always easily disclosed form strikingly Some consumers do not realize that the surcharge is PLUS what they are already paying to their own financial institution in transaction fees. This problem will continue to draw attention.