Since the advent of plastics to replace banking transactions performed by a bank teller, things have become a lot faster and more convenient. Whether it’s a regular ATM card, a debit card or a credit card, owning at least one in your wallet seems almost like a necessity. With these plastics, you can conveniently make a purchase or perform quick self-serve transactions which would have taken you a long time at the bank. Doing withdrawals and deposits as well as complex transactions like bank transfers can now be done with the aid of ATMs.

But before you work on getting your next card, it’s important to take note that not all cards have the same functions and uses. Keep reading and learn about the key differences between an ATM card, a debit card and a credit card.

ATM Cards

An ATM card is a pin-based card that lets you withdraw cash. This type of card is linked to either a savings or checking account at your bank or financial institution because it needs to access cash. When you take out cash using an ATM, the money is immediately debited from your account.

While most withdrawals come with a cost, it is still much more convenient to have an ATM card, especially when you need immediate cash. ATM cards can also be used as debit cards but the details on how each card differs from one another will be explained further in the next part of the article.

Debit Card

A debit card is somewhat similar to an ATM card because it can be used to take out cash. It is also tied to a checking or savings account which will reflect a withdrawal made in real time. If there’s one thing that a debit card can do which an ATM card can’t, it is to make purchases. This is one of the best things about debit cards. You don’t have to have access to a line of credit to make a cashless purchase. As long as you have sufficient funds in the checking account tied to your debit card, making a purchase can be possible.

To complete a purchase, you will be required to encode your personal identification number or PIN. Be sure not to write it anywhere on your debit card. It’s a piece of information that should be kept confidential to avoid becoming a victim of fraudulent transactions. If you want to push through a transaction but don’t have enough funds, you may authorize your bank to approve it. However, you should expect overdraft fees. Another option is to tie your card to a checking account which also has a savings account. This may not guarantee zero overdraft fees but it will cover the needed amount to complete the purchase.

Credit cards

A credit card is not in any way similar to a debit card. A debit card deducts funds from a checking account when you use it for purchases. On the other hand, when you use a credit card, it seems like you are taking out a loan which you will have to pay at a later time.

Acquiring a credit card requires the approval of a bank or a financial institution. They will review your creditworthiness and decide whether or not to approve your credit card application. Take note that applying for a credit card may take a toll on your credit score. One too many credit checks may incur a negative impact on your credit history. So, carefully choose a bank or financial institution to get a credit card from before you even begin the process.

A credit card can be used to make purchases both online and with accredited merchants or stores. Because it is not tied to a checking or savings account, you can’t use it to take out cash at ATMs. However, when you use it for shopping, you can pay for your purchase at a later time depending on your cycle and due date. A credit card also offers perks and rewards but they vary based on the type of credit cards offered by your financial institution.

Determining between an ATM card, a debit card or a credit card is a decision that should be made according to your specific needs. Use this guide to help you choose the card best for you.

And if you’re ready to acquire any of the three cards, please feel free to visit Calcite Credit Union.