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How does an ATM card differ from a debit card?

Curious about ATM Cards

How does an ATM card differ from a debit card?

An ATM card and a debit card have similarities, as both are issued by banks and facilitate financial transactions. However, there are key differences between these two types of cards:

ATM Card:

1. Functionality: An ATM (Automated Teller Machine) card is primarily designed for accessing automated teller machines. Its main function is to allow the cardholder to withdraw cash from ATMs and check their account balance.

2. Limited to ATMs: ATM cards are typically limited to ATM transactions and balance inquiries. They are not designed for making purchases at pointofsale (POS) terminals or online transactions.

3. No Purchase Capability: ATM cards usually lack the capability to make debit cardlike purchases, as they do not have a card network logo (e.g., Visa, MasterCard) and are not associated with a payment network.

4. PINBased: ATM card transactions are PINbased, meaning that the cardholder must enter their Personal Identification Number (PIN) to complete transactions. This adds a layer of security to ATM card transactions.

5. Access to One Account: ATM cards are often linked to a single bank account, typically either a savings or checking account. They do not provide access to multiple accounts or the ability to link to other financial services.

6. Limited International Use: While some ATM cards may allow international ATM withdrawals, they may not be accepted for purchases or transactions in foreign countries. International ATM usage can incur currency conversion fees.

Debit Card:

1. Versatile Functionality: A debit card offers more versatility compared to an ATM card. It can be used not only at ATMs but also at POS terminals for making purchases, both inperson and online.

2. Payment Network Logo: Debit cards typically feature a payment network logo such as Visa, MasterCard, or others. This allows them to be used wherever the payment network is accepted.

3. PIN or Signature Transactions: Debit card transactions can be both PINbased and signaturebased. Cardholders can choose to enter their PIN or sign for purchases, offering flexibility in how transactions are processed.

4. Access to Multiple Accounts: Some debit cards may be linked to multiple accounts, such as savings, checking, or even prepaid accounts. This allows cardholders to choose the account from which funds are drawn when making a purchase.

5. Cashback and Rewards: Many debit cards offer cashback rewards or loyalty programs, allowing cardholders to earn benefits for using the card for purchases.

6. Wider International Acceptance: Debit cards are widely accepted internationally, both for ATM withdrawals and purchases. They can be used in foreign countries with greater ease than ATM cards.

In summary, while both ATM cards and debit cards are issued by banks and used for financial transactions, the key difference lies in their functionality and versatility. ATM cards are primarily for ATM use and balance inquiries, while debit cards offer a broader range of capabilities, including POS purchases, online transactions, and international use. Debit cards are also associated with payment networks and may offer additional features like rewards programs.

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