Debit cards and ATM cards: What are the differences and benefits
Updated August 30, 2024 | Published July 29, 2024
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Categories:
- Banking
Debit cards and ATM cards may look similar, but they serve different purposes. We’ll go over some of the basics of these cards so you can be well-informed and make the right financial decisions.
Key Takeaways:
- Debit cards are issued for checking accounts
- ATM cards are issued for savings accounts
- Debit cards have more flexibility and allow you to make purchases in-store and online.
- ATM cards only transact at ATMs
Debit Cards
A debit card is issued with your checking account. It allows you to withdraw and deposit money at ATMs as well as make Point of Sale (POS) transactions in-store or online. Swiping, tapping, or inserting the chip of your card at the store will automatically move money from your checking to make your purchase. When shopping online, you will need to enter your card numbers to complete your transaction.
You will create a Personal Identification Number (PIN) that is connected to your card for security reasons. Do not give this PIN to anyone. You will be asked to enter your PIN at ATMs and when making purchases in-store. This is so that nobody other than you can complete the transaction and access the funds in your account.
FRAUD WARNING: If someone claiming to be Webster First calls and asks for your PIN, hang up! Your financial institution will never ask for your PIN, as that is your private information. These types of calls come from scammers looking to steal your information. Always hang up and call the credit union’s trusted number or visit a branch before giving up any information.
ATM Cards
An ATM card is usable only at an ATM. You will be able to withdraw cash and may be able to deposit cash or checks depending on the machine’s capabilities. Like a debit card, your ATM card will have a PIN. Sometimes a financial institution may only allow you to use an ATM card at one of their ATMs. Others will allow you to use the card an any ATM you need. Be aware that you may be subject to foreign ATM charges at ATMs outside of your financial institution’s network.
These cards are issued much less often than they used to be because debit cards can do everything an ATM card can do and more. But there are still instances where someone may want one. Like if you don’t have your checking account at the same institution that you have your savings. Typically when you have a checking and savings at the same bank or credit union, you can connect your savings to your debit card, allowing you to access the funds from both accounts when you visit an ATM. In this case, you would not need both cards. But if you have a savings account at a separate institution from your checking account, you may need an ATM card to access those funds outside of visiting a branch.