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Home >> Accounts >> ATM/Debit Cards
Understanding the Difference in Plastic Cards
Can you help me understand the differences, advantages, and disadvantages between ATM cards, check cards, and debit cards?
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 An ATM card is a card that can be used at an ATM to withdraw cash, make transfers between accounts, obtain balance information, and complete other transactions that the issuing bank has made available. Usually, the cards can be used at other banks' ATMs that participate in shared ATM networks. When used at other banks' machines, some of the functions available at your own bank's machines may not be available. Some banks' ATM cards can also be used on a limited basis at merchant locations to pay for purchases and, in some cases, obtain cash back or cash in excess of the total purchase amount.
Check cards and debit cards (two names for essentially the same product) typically include all of the functionality of an ATM card, plus the ability to pay for purchases at participating merchants or over the Internet or telephone. Most such cards are issued in connection with either the Visa or MasterCard brand, and can be used at most merchants who accept either Visa or MasterCard credit cards, in most cases by signing a sales slip just as you would for a true credit card purchase. The ability to make purchases with a card can be more convenient than writing a check, and there are quite literally millions of merchant locations worldwide where you couldn't use a check at all, making use of a card that much more convenient. Debit cards and check cards are accepted at vastly more locations than ATM cards are, particularly the farther from home you travel.
Heavy use of a debit card (or an ATM card with purchase capabilities) can cause problems and result in heavy fees if your bank allows such transactions to overdraw your account. It's critically important that you keep track of your spending with such a card, just as you should record checks you write from your account, in order to know what's available for spending and to avoid overdrafts. It's tempting to grab your sales receipt, stuff it in your wallet, meaning to record it later.
Federal law and regulations protect consumers from unauthorized used of any of the cards you list. However, that protection is limited. A layer of better protections is added when a debit card is used and the transaction is signed for, rather than authorized with a personal identification number or PIN. For even more protection, it's often safer to use a credit card for purchases, if one is available.
Published on BankingQuestions.com 10/01/09
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