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When it comes to accessing your bank funds, ATM cards and debit cards are two commonly used options, but they serve different purposes. While both provide convenient ways to manage your money, understanding the key differences between them can help you choose the right card for your banking needs. Keep reading to learn how ATM cards and debit cards compare, highlighting their features, benefits, and the scenarios where each is most useful.
What Is an ATM Card?
An ATM card is a bank-issued card that allows customers to access their accounts through automated teller machines (ATMs). With this card, you can perform basic banking functions such as withdrawing cash, checking balances, and transferring funds between accounts. It is typically linked to a checking or savings account.While ATM cards offer limited functionality compared to debit cards, they are designed primarily for cash access. You can use an ATM card at machines that accept your bank’s network, making it a convenient option for withdrawing cash, especially when traveling or at off-hours when branches are closed.One key distinction is that an ATM card cannot be used for purchases or online transactions like a debit card. It is specifically for ATM access and may not offer the same fraud protection or spending flexibility. Many banks now offer debit cards with ATM access, combining the features of both cards into one convenient tool.Recommended: Checking Accounts vs Debit Cards
How Do ATM Cards Work?
How ATM cards work is comparable with how debit cards work at automated teller machines. You may insert your ATM card into an ATM card reader and enter your personal identification number (PIN) to withdraw cash from your account.In addition to withdrawing cash, an ATM card may allow you to do the following:
A debit card is a bank-issued card that allows customers to access the funds in their checking or savings accounts for a wide range of transactions. Debit cards can be used for purchases at stores, online shopping, and ATM withdrawals. When you use a debit card, the money is directly withdrawn from your account, making it a convenient way to manage your spending without needing cash.In addition to being a convenient payment method, debit cards often come with fraud protection features, such as PIN codes or chip technology, to secure your transactions. Unlike ATM cards, which are limited to ATM withdrawals, debit cards offer more flexibility, allowing you to make purchases and manage your finances at a broader range of locations. Recommended: Guide to Credit Cards vs Debit Cards
How Do Debit Cards Work?
Debit cards work as an instrument for withdrawing funds or making transactions. Depository institutions — including banks, credit unions, and federal savings and loan associations — may issue debit cards to checking account holders. Cardholders can make debit card transactions online, in person, or over the phone. One difference between ATM card and debit card transactions is that debit cards may operate on the American Express, Discover®, Mastercard, or Visa networks. When comparing debit vs. ATM card instruments, the latter may not have the ability to make point-of-sale transactions at retail outlets.
ATM Card vs Debit Card
The below table compares ATM vs. debit card transactions and highlights the difference between ATM and debit card activity:
ATM Card
Debit Card
Can be used to withdraw cash from an ATM
Can be used to withdraw cash from an ATM
May be linked to a checking account, savings account, or money market account
May be linked to a checking account, savings account, or money market account
May not have the ability to make POS transactions through a major card payment network
May have the ability to make POS transactions over the American Express, Discover, Mastercard, or Visa networks
Cardholders may face excessive transaction fees if they make more than six transfers or withdrawals during a one-month statement period
Cardholders may have daily ATM withdrawal limits and daily POS transaction limits restricting the card’s 24-hour spending power
ATM Card vs Debit Card Usage & Fees
Here are some of the fees that cardholders may face when using an ATM card or debit card:
ATM fees for using a nonproprietary ATM unaffiliated with your depository institution
Excessive transaction fees if your ATM card exceeds any transaction limitations during a monthly statement period
Choosing between an ATM card and a debit card depends on how you plan to manage your funds. If you only need to access your account for cash withdrawals and balance checks, an ATM card might be sufficient. It’s ideal for those who don't need to make purchases or online transactions and want a basic banking tool for ATM access.However, if you want more flexibility, such as the ability to make purchases in stores, online shopping, and bill payments, a debit card is the better option. With a debit card, you can do everything an ATM card allows and more, giving you full access to your funds for a wide range of transactions.Recommended: Guide to Opening a Savings Account
Getting an ATM or Debit Card
It’s possible to open multiple bank accounts and get an ATM card for one bank account and a debit card for another.There are many types of bank accounts you may consider. You can get an ATM card linked to a money market account or savings account and a debit card linked to a checking account.The process of opening a bank account is relatively straightforward if you’re an adult with proof of identity. If you get an ATM card or debit card, you may use either card for withdrawing cash or depositing funds.
The Takeaway
Both debit cards and ATM cards offer essential access to your bank funds, but they serve different purposes. An ATM card is best for basic banking tasks like cash withdrawals and balance checks, while a debit card provides a broader range of functions, including purchases and online payments. They can both be linked to checking accounts, savings accounts, and money market accounts.If you’re looking to earn interest on your savings, Lantern by SoFi can help. Our online banking marketplace allows you to compare APYs and choose a bank account that’s right for you.Compare high-interest savings accounts with Lantern.
Frequently Asked Questions
Is an ATM card the same as a debit card?
Can you use your ATM card as a debit card?
Do you need an ATM card if you have a debit card?
Photo credit: iStock/South_agency
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About the Author
Sulaiman Abdur-Rahman
Sulaiman Abdur-Rahman writes about personal loans, auto loans, student loans, and other personal finance topics for Lantern. He’s the recipient of more than 10 journalism awards and served as a New Jersey Society of Professional Journalists board member. An alumnus of the Philadelphia-based Temple University, Abdur-Rahman is a strong advocate of the First Amendment and freedom of speech.
