Nowadays, plastic cards are very much popular and preferred for all kind of financial payment, whether it is online shopping or grocery shopping in the mall. It has a lot of benefits like you don’t need to carry cash everywhere, easy to use, safe and many more.
It used to be commonly thought that you needed a credit card to complete certain transactions, such as rent a car or to purchase items online, or that it was safer and easier to travel with a credit card rather than carrying cash or using a checkbook.
There are a lot of banks out there offering many types of cards and these cards offer a lot of benefits like cash back, discounts on partner merchandise and more. Generally, there are 3 kinds of cards which any bank or financial institution offers i.e. ATM, Debit and Credit card. Before, we go for any type of cards; we must know them properly, therefore in this article, I have tried to explain the basic difference between the ATM, Debit and Credit Cards.
You may like to read my previous article on Credit Card Business Model which explains, how these credit card companies are making a huge profit by connecting banks around the world. Also, how How Apple pay works. Give your support by sharing and commenting on the articles.
What is an ATM Card?
Most of us think; the ATM card as similar to the modern debit card but it’s not the same. ATM card it a card provided by the banks or the financial institution which enables a customer to access automated teller machines (ATMs) to get the cash whenever needed. ATM cards are payment card size and style plastic cards with a magnetic stripe or a plastic smart card with a chip that contains a unique card number and some security information such as an expiration date or CVVC (CVV).
An ATM card is a PIN-based card. That means that in addition to using it at ATMs, you may also be able to use it to make purchases (by entering your Personal Identification Number) if the merchant is using one of the same electronic ATM networks that’s listed on the back of your card.
What is Debit Card?
Debit Card is a plastic card issued by the bank or financial institution to facilitate the customers to withdraw money or do online shopping. These cards have a small logo, generally MasterCard or VISA. That means you can use a debit card wherever Visa® or Mastercard® debit cards are accepted, for example, department stores, restaurants, or online. You can read more about MasterCard and VISA here. Unlike the ATM card, Debit cards are widely accepted and their cards could be used at Point Of Sale terminal of all malls, shopping center and merchandise where they accept the cards provided by the printed network provider.
Many Debit cards provide various attractive offers on partner merchandisers, restaurants, online sites, etc. They also offer cash back on your shopping to attract more customers.
What is a Credit Card?
So, How ATM Card is different from the Debit Card?
- ATM cards could be used at the ATM machine to withdraw the cash, whereas Debit card could be used to withdraw the cash from ATM machine as well as to buy goods and services.
- Unlike, ATM cards, Debit cards are widely accepted at most of the payment terminals and also provides many benefits and offers.
- Debit Card has a payment network logo like MasterCard, VISA, etc. whereas it is missing from the ATM card.
- Whenever you withdraw money from the ATM or make a payment for the goods and services through a card, the amount gets deducted from the bank account linked to the card.
What is the Difference Between Debit Card and Credit Card?
- When you use the Credit Card to buy goods or services, you are borrowing money from the issuer bank and you need to pay before the due date. The money will not be deducted from your bank account. However, when you use Debit Card, money gets deducted/blocked from your linked bank account.
- Most of the time, Credit Card offers more discount and benefits at partner merchandisers than the Debit Card.
- You can count on Credit Card if you are running out of money in the bank account, however, Debit Card transactions will be declined if your bank account has no balance.
- Credit Card enables you to expense more, Debit Card keep your expense in control.
- Credit Card comes with huge penalty whenever you go beyond your credit limit, miss your credit card bill payment or accidentally use it in ATM card to withdraw cash. A Debit Card, on the other hand, keep you away from these penalties.