Nobody likes to get pick pocketed. It’s a gut wrenching feeling when you reach down and discover your wallet is missing. What if someone was quick enough to remove your wallet, take out a few bucks, and then put it back without your knowledge? They could probably get their own FOX reality show, “So you think you can pickpocket.” You’d have to be one sneaky thief to be so quick. Unfortunately, electronic thievery is even faster, and it happens everyday.
Every time you use your debit card to get cash out at a non-network ATM, you may be charged $2 to $3 per bank. Your bank can charge you a few dollars just to get money out of another bank’s ATM, and the other bank may charge you as well. If you withdraw $40 you could end up paying $6 in fees. That’s a one time 15% fee. What if you were at the store and your cashier kept 15% of your change, would you just accept it? A total of $4 to $6 doesn’t seem like much, but what if you do this once per week? That adds up to $200 to $300 dollars per year.
To add insult to injury, you will usually pay 50 cents for the privilege of keying your PIN to use your debit card. Many banks charge a 50 cent fee each time you swipe your debit card and choose “debit” instead of “credit” at the store.
The only time you should use your debit card as “debit” is if you’re getting cash back (assuming your bank charges this fee). And, the only reason you should do that, is if your only other option is to pay to use an ATM. Paying 50 cents is a much better than paying $4 to $6.
Is this the same as getting pick pocketed? Of course not. Getting pick pocketed is a one-time occurrence, and something you can’t help. ATM and debit fees happen again and again, and you’re getting robbed by choice. Don’t pay the bank for the privilege of using your own money. Only use ATMs that are in-network (no fee) and don’t get cash back, or key your PIN when making routine purchases—if your bank charges to do so.
Now, check your pocket or purse and make sure your wallet is still there, there may be an ATM nearby waiting for you to drop your guard.
Bill Pratt is a former credit card executive turned student-advocate. He is the author of Extra Credit: The 7 Things Every College Student Needs to Know About Credit Debt & Ca$h. Bill speaks at colleges to educate and entertain students about real-life issues in money, leadership and success. His goal is to help students succeed personally and financially so they can improve the lives of those around them.