ATM Card vs Debit Card: The Differences You Need To Know

Posted by CreditCardGuru

Q: Why do some people call them debit and others say ATM cards? Are they the same thing or are there differences between the two?

A: Like you said many refer to them as one and the same. The truth is they are quite different.

MasterCard debit cardWhat are ATM cards? These operate over a network of different banks connected together. Look on your card to find out which network(s) it can access: STAR, LINK, Cirrus, PULSE, PLUS, Interswitch, Interac. You will know you are making an ATM purchase/transaction because when you do so, you will be required to enter your PIN.

What are debit cards? These are much more common. You have the ATM capability mentioned above, as well as the ability to make purchases without a PIN over the Visa or MasterCard network, processed the same way as a credit card transaction (that’s why you have to select “credit” instead of “debit” to do this).
Debit Cards


  • More versatility. Can be used for everyday purchases as well as banking transactions like deposits and withdrawals at ATMs.
  • For those prone to mismanaging their money, a debit card is a simpler option than a credit card, since you can spend only the money in the bank.


  • Since no PIN is needed for debit purchases, if your card is stolen then fraudulent purchases can be easily made. With no buffer between the money in your checking account and the debit card, the criminal could easily deplete your checking account balance. Debit cards also have fewer legal protections against fraud than credit cards do (although many banks will be more generous than is required by law). Even though fraudulent purchases will likely be reversed, it doesn’t change the fact that during your checks may have bounced while you were sorting things out.
  • Little to no rewards on purchases.

versus ATM Cards…


  • The PIN is always necessary for a transaction. This might make fraudulent usage more difficult.


  • ATM transactions outside your bank probably involve fees (both by your bank as well as whatever the ATM charges).
  • The legal protection surrounding PIN-based debit/ATM card transactions are flimsy, at best. You can see this for yourself in this FTC article.

Debit cards vs. ATM cards… which are better?

That depends on your needs. The part the scares me about both is that you might be liable for fraudulent transactions if your PIN was used to commit them — although things are changing in October, when it comes to MasterCard cards.

On the other hand, if fraud is committed without a PIN (as a credit transaction over Visa/MasterCard) the card’s zero liability protections come into play.

What’s the safest bet for 2014?

A prepaid card acts as a good safety buffer. If someone steals your ATM or debit card, they can spend your money and even if the bank refunds the money, it could still cause temporary problems like the checks you write for rent or car payments being bounced, because of insufficient funds. For that reason, I recommend going with a prepaid card like this for your purchases, so your bank account isn’t directly at risk.

However ultimately, you get the best fraud protection with an actual credit card. The Federal laws protecting you against fraud are much stronger for credit versus debit. With credit, the most you can be held liable for is $50 per incident (but practically all major credit cards waive the $50 “deductible” and give you $0 liability). If you need a good one to start with, here are 3 good options depending on your credit level:

Updated August 2014

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8 comments... read them below or add your own

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  3. Curiously February 27, 2014 at 3:25PM

    which one is more secure if you were to want to remain anonymous. Not leave a trail so to speak for violent ex lovers?

    Would the prepaid debit do this as opposed to ATM or credit or bank debit?

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  6. True Corkonian December 10, 2012 at 8:42AM

    It should be noted that this is not the case in Europe where DEBIT cards require PINs. I cannot believe how far behind the US are in terms of the CHIP & PIN technology. ATM cards are on the way out. Nobody wants to have to walk around searching for an ATM every time they want to spend cash.

    I have a great card. It is a DEBIT card/Prepaid MasterCard from Bishopstown Credit Union in Ireland. I need a PIN to make a purchase in Europe and everywhere that recognises CHIP & PIN. I even get a text message to my mobile phone/cell each time I use it – CLEVER. All this from a Credit Union – It is the way to go!

    • RDK December 8, 2012 at 2:13PM

      By the definitions given in this blog what you are describing as a “debit card” is actually an “ATM card”. ATM cards have been used to pay (with a PIN) in stores in the US for decades. As far as chip cards go, they simply didn’t take, maybe because they are often associated with prepaid cards.

      After reading this article I really don’t see a need for a debit card. Seems like it would be better to just pay with cash, or a credit card and pay off the balance at the end of each month. That way you get the credit card rewards and by keeping you ATM/debit card in you wallet and using it only at an ATM to get cash you reduce the risk of someone stealing your card and/or PIN. And it’s better if someone steals your credit card rather than your debit card.

      • Sweb January 13, 2014 at 4:48AM

        They are different. Many banks won’t allow you to use an ATM card for anything other than ATM withdrawals (as in at bank cash machines). You can’t use the for purchases at retailers. You can only use debit cards.

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