Difference Between an ATM Card and Debit Card

Have you ever used an ATM or a debit card to withdraw cash or make a purchase? If so, you might have noticed that these two types of cards look similar and perform similar functions. But technically, they are not exactly the same. 

ATM (Automated Teller Machine) cards and debit cards have some key differences in terms of their features, usage, and security. To help you understand which type of card is more suitable for your needs, let us explore the differences between ATM cards and debit cards in a more detailed manner.

How does an ATM Card work?

An ATM card, or Automated Teller Machine card, enables you to access your bank account and withdraw money from an ATM machine. ATM cards are typically issued by a bank and are linked to a specific bank account. 

When you use an ATM card, you need to enter a personal identification number (PIN) to authenticate the transaction and access the funds in your account. They can only be used to withdraw cash from an ATM machine or to perform basic banking transactions, such as checking your account balance or transferring funds between accounts.

How does a Debit Card work?

A debit card allows you to access funds from your bank account to make purchases or withdraw cash. It can be used not only at ATMs but also at merchants' point-of-sale terminals, online retailers, and other locations where debit card payments are accepted. 

When you use a debit card to make a purchase, the transaction amount is deducted from your bank account immediately. Some debit cards also offer additional features, such as rewards programs, cashback offers, or fraud protection services. Debit cards can also be linked to different types of bank accounts, such as checking, savings, or money market accounts, and are often issued by banks or credit unions. 

ATM Card vs Debit Card Difference

While both ATM cards and debit cards provide access to your bank savings account, both cards vary in their functionality and versatility for making purchases and managing your finances.

Usage

As mentioned earlier, ATM cards can only be used to withdraw cash from ATMs. Meanwhile, debit cards can be used not only at ATMs but also at point-of-sale terminals, online retailers, and other merchants that accept card payments.

Functionality

ATM cards only allow you to withdraw cash, while debit cards provide more functionality. This includes the ability to make purchases, transfer funds, or pay utility bills.

Associated accounts and fees

ATM cards are usually linked to a specific bank account. But, debit cards can be linked to various types of accounts, such as checking, savings, or money market accounts. On a lighter note, ATM cards come with fewer fees than debit cards, which may charge transaction fees, annual fees, or other fees depending on the issuer and type of account.

Security

ATM cards are generally considered less secure than debit cards because they lack the security features of chip technology. Thus, ATM cards may be more susceptible to skimming or other forms of fraud.

Rewards

Debit cards may offer rewards programs, cashback offers, or other incentives, while ATM cards typically do not offer any rewards. Hence, ATM cards are more like a piggy bank where you save your money for spending but don’t gain extra perks.

What makes a prepaid card different from ATM and debit cards?

A prepaid card is different from an ATM card or debit card in several ways. For one, a prepaid card is not linked to a bank account, whereas ATM cards and debit cards are typically associated with a specific bank account. Prepaid cards are usually loaded with a specific amount of funds, and you can only use the card to make purchases or withdraw cash up to that amount.

Second, prepaid cards typically do not offer Rewards features and often have more fees associated including activation fees, transaction fees, and inactivity fees.

Lastly, prepaid cards may have more limited acceptance compared to ATM or debit cards. This means they may not be accepted by all merchants or may have certain restrictions on where they can be used.

Which card is best to use?

The best type of card to use depends on your individual needs and financial situation. 

Debit Cards are Ideal for Quick Access to Funds

If you need to access your funds frequently, a debit card is the best option since it can be used at merchants' point-of-sale terminals, online retailers, and other locations where debit card transaction payments are accepted. So if you don’t want to miss payments for your purchased affordable house and lot property, choose a debit card. 

In addition, a debit card holder may also enjoy rewards programs, cashback offers, or other incentives. 

ATM Cards are Ideal for Savings and Investments

Since ATM Cards have limited access to funds, you can control your spending habits, especially if you’re an impulsive buyer. You can’t touch your savings or convert your investments whenever you wanted to. So, there’s a huge possibility of saving money for a house and lot in the Philippines.

Also, if you want to avoid fees, it's best to use an ATM card because it has lower fees compared to debit and prepaid cards. 

Prepaid Cards are Ideal for Anti-Fraud and Anti-Theft

However, if you're concerned about fraud or theft, prepaid cards may be a good option as they are not linked to a bank account. But you must keep in mind that prepaid cards typically have more fees than ATM or debit cards. Lastly, if you have poor credit or don't have a bank account, a prepaid card may be a good option as it does not require a credit check or bank account to use. 

Whichever you’ll choose, you must always consider savings as your top priority and start at a young age. No matter what limitations they have, you will always find ways to spend them, especially if too many emotions are involved. If you target in investing an affordable house and lot for sale in your area, you must weigh things and check your savings if you have spare money for other needs and wants besides the monthly budget. 

Thankfully, Lumina Homes has available properties nationwide, reaching over 50 locations around the country. Our housing packages come with flexible payment schemes and various payment options. This includes online and offline transactions as well as debit card transactions. Other payment options are if you are a credit card holder or have a checking account.

Do you want to know what your preferred bank card can do to you in terms of real estate investing? Inquire now and talk to our Lumina sellers near your area.