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For many people, cash is the preferred method of transaction when purchasing goods or services. There are numerous reasons: some people feel more comfortable tracking spending by the amount of cash in their wallet, others shop frequently at locations that do not accept cards, and still others believe that cards are a more expensive transaction method because of interest on payments and similar factors. Lately, studies have surfaced that help to dispel this myth of cash being the cheaper option. Here, we’ll explore the hidden costs of using cash.
First, some interesting facts about ATMs. The average ATM in the US posts 3,000 transactions per month, and in total ATMs dispense $33 billion in cash every month. In fact, ATMs account for 65% of all banking transactions in the US. But at what cost? There are about 370,000 automated teller machines across the United States, about 1 for every 296 people. This dramatic growth in the number of ATMs can’t be attributed just to banks wanting to help out customers, right? Of course not- ATMs are a very profitable venture for both banks and independent operators! About 98.3% of ATMs levy surcharges on customers, and these fees are rising every year. According to a report from Bankrate.com, the average cost of using an out-of-network ATM is $3.43. On a $40 withdrawal, that’s an 8.6% charge! In fact, the average American pays an estimated $60 to $65 in ATM fees alone per year. In total, Americans paid $4 billion in ATM “convenience” fees in 2008.
When you compare the average $3 surcharge to occasional debit/credit card fees of about 50 cents, cards don’t seem so expensive. And then, consider the advanced tracking capable with combining a credit card account with an online budgeting service like Mint or Wesabe- it’s possible to know exactly where your money is going! That’s not even mentioning the various rewards and cashback programs offered by credit card companies these days, allowing you to earn 1-2% of your money back. For some, that’s savings of hundreds of dollars a year.
Why use Venmo? It allows you the benefits of cash (you can use it at vendors that don’t accept cards), and combines it with the convenience of cards (tracking spending, cashback, avoiding trips to the ATM). Sign up for Venmo today and eliminate pesky ATM fees once and for all!