Watch Out for ATM Fees That Add Up

Using cash usually makes more sense than credit. You don't have to deal with interest, you know you can't spend more than what's in your account and the act of physically parting with your money makes you less likely to splurge -- and wind up in debt.

But there's at least one pitfall to paying with paper - ATM fees. Let's say you need to take out some money and you aren't anywhere near your bank. Instead, you go to the nearest ATM. You can expect a fee of at least $3 for using an ATM other than your bank's. And that's not all. Your bank thinks it has to punish you for withdrawing money elsewhere, so you can also expect to get dinged up to $2 on the other side. If you're taking out $20, you've already spent a quarter of your money before you even break the bill.

Fortunately, the situation can be pretty easily avoided.

With a little planning, you can estimate how much you'll need between bank visits. Add up the amount you expect to spend on shopping trips, errands, vacations or any other time when you might be in need of cash but away from the ATM. Then take out just slightly more than you anticipate you'll need. Not only will this help you avoid relying on your credit card (and ultimately getting stuck paying interest) but you'll probably spend less because you're limited to the amount in your wallet.

Or here's another option. Remember how, once upon a time, people used to carry checkbooks in their purses or pockets? They were onto something. When you write a check, you're essentially paying with cash minus the hassle of running to the ATM, since the money is taken right out of your checking account. However, it's wise to keep a close eye on your account if you go the check route - you don't want to bounce a check and get hit with a fee.

Switching to cash might take a little extra effort, but it's nothing compared to the problems you'll have down the road if you keep up your credit habit. Credit can be a trap - the more you use it, the more you have to keep using it, since your growing balance takes larger and larger bites out of each paycheck.

Breaking free is as simple as allocating money to paying down debt each month. Don't think you can manage? Consider bankruptcy - filing offers an affordable payment plan and protection from creditor actions like foreclosure. Find our more for free when you sign up for a complimentary personal debt analysis with a Chicago bankruptcy lawyer. Because the more of your debt you eliminate today, the less you'll have to pay tomorrow.

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