Automated teller machines provide cash instantly and

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Automated Teller Machines Provide cash instantly and accessed through a credit or debit card Convenient but can be costly Banks charge access fee. Using ATM not owned by your bank can cost several dollars Attract crime 32
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Debit Cards Allow you access to money in your accounts electronically. Looks like a credit card but acts like a checking account. ATM card is type of debit card but with access to savings accounts. Check card blocking policies. 34
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Smart Cards Funds are transferred into cards which are used like debit cards, but withdraw from an account that’s actually stored magnetically on the card. Perform the same services as a debit or credit card. Allocated funds can run out. Some have issuer-limited usage. 35
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Prepaid Debit or Gift Cards Two main types: Single purpose or “closed-loop” cards which can be used at only one store. Multi-purpose or “open-loop” cards which can be used just like a credit card and can be reloaded. Many have activation fees, maintenance fees, and ATM transaction fees. 36
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Fixing Mistakes—Theirs, Not Yours Human and computer errors. Avoid human errors such as those involved with deposits at ATMs. Report immediately. Call or write the bank. By law, write within 60 days of receiving your statement. 37
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Summary Cash management is balancing the risk of not having enough in liquid assets with the potential for greater return on other investments. Automatically save some of your income and learn to live on take- home income. Choose cash management alternatives from among deposit-type and nondeposit-type institutions. 38
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Summary Compare various cash management alternatives. Compare their rates, return, and safety. With checking accounts look into cost, convenience, consideration, and safety. Electronic funds transfer transactions occur immediately and avoid use of cash or check. 39
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End of Chapter 5 Slides 40
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