ATM Cards Vs. Debit Cards: Which is Better?

  • If you want to access your account, some bank accounts have a debit card or an ATM card.
  • ATM cards are only for access to ATMs, but debit cards allow you to purchase items.
  • When managing a bank account with a card, watch out for overdrafts or possible ATM fees.
  • Read more stories from Personal Finance Insider.

If you’re looking for a bank account that gives you easy access to your money, you’ll often find plenty of options, such as a debit card or an ATM card.

Although a debit card provides ATM access, it is not exclusively the same as an ATM card. Knowing the differences between these two cards will help you better understand your card limits and how to manage your account.

Here’s what you need to know about debit cards and ATM cards, so you know exactly what you’re getting before you open an account.

Bank card vs. debit card: at a glance

Although ATM cards and debit cards provide access to your bank account, their functionality is completely different. ATM cards have more limitations on how they can be used.

  • A Bank card is a bank account tool that only allows you to use money in your account if you are at an ATM.
  • A debit card is a bank account tool that lets you use the money in your account anywhere, including to buy items.

What is a credit card?

An ATM card only provides ATM access to your bank account. You will be able to withdraw money from an ATM, check your account balance or transfer money to different bank accounts.

ATM cards are often linked to money market accounts. However, some financial institutions also offer an ATM card with a checking or savings account.

What is a debit card?

A debit card lets you use money from your bank account to use ATMs or make purchases.

Remember that debit cards have daily purchase limits, which ATM cards do not. Daily purchase limits limit how much you can spend when using a debit card.

Debit cards are usually included in checking accounts. However, some financial institutions also offer a debit card with a money market or savings account.

How to manage a bank account with a card

Erika Safran, CFP® and Principal at Safran Wealth Advisors, LLC, says a bank account with a card can be ideal for someone who is young or doesn’t yet have a credit card. If you get an account with a card that lets you spend, Safran points out that you’ll have a valuable feature because it’s hard to live without a credit card.

Safran says there are several bank fees to consider before opening an account with a card, such as monthly services or out-of-network ATM fees.

“If you take money from an outside vendor, so to speak, chances are that not only will you be charged for using that machine, but your bank may also charge you,” Safran says. “Let’s say you take $20 from the ATM at the candy store. The candy store will charge you $2 for using their machine, and then your bank may charge you an additional $3 for banking outside of their system. That means it only costs you $5 to withdraw $20. That’s big.

While you can buy items with your card, Safran says it’s also important to watch out for account overdraft. You may have to pay overdraft fees.

“You are in a hurry, you need the money or you are not careful. You may take more than you have and owe more than you have withdrawn,” adds Safran.

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