Types of ATM Cards

ATM cards are one of the significant types of payment cards that exist currently. The cards tend to be similar in size to business cards, and usually consist of plastic and magnetic stripes. They also contain chips for added security.

Several kinds of ATM cards exist. These types of ATM cards are all compatible with ATMs, but don’t always function in the same way. They include:

  • ATM-only cards
  • Debit cards
  • Credit cards

1. ATM-Only Cards

Typically, financial institutions – such as banks – tend to issue dedicated automated teller machine (ATM) cards to their members to enable them to withdraw money whenever they want from their affiliated automated teller machines. If you use this kind of card, the money will be withdrawn from your account.

In addition, you can use ATM cards to check your account balance. Also, you can deposit cash and checks into your account via the ATM.

But for ATM-only cards, you cannot pay for goods and services directly. Neither can you withdraw unlimited amounts of money, as there is usually a daily limit. Further, the money in your account can also limit what you can access.

2. ATM Credit Cards

Many types of credit cards that exist can also be used in ATMs. For you to use your ATM card as a credit card, you need to have an approved line of credit with a financial institution. That way, the money will not be deducted from your checking account.

With this kind of card, you can pay for goods and services at affiliated point of purchase points, even when you have no money, or get a cash advance. Afterward, you can pay off what you owe. Some of the places in which you can use your credit card include department stores, online stores, etc.

It is worth noting that ATM credit cards have a limit, which is based on your creditworthiness. If you don’t pay your bill on time, your balance will accrue interest.

Examples of credit card brands that work within ATMs include Visa and MasterCard.

Read More​: What Are Interest Expenses?

3. ATM Debit Cards

ATM cards belong to the list of prepaid cards because they are funded by money that is in your account. So they are also issued by a bank or financial institution where you hold an account. Typically, when they act as debit cards, the money will be withdrawn from your account in a manner similar to ATM-only cards. You also need to have a PIN to operate one.

However, ATM debit cards are also acceptable at approved point of purchase points in many retail outlets, such as department stores and gas stations. You simply swipe or insert the card, and money will be withdrawn from your account. Therefore, if the retail outlet accepts your brand of ATM debit card, e.g. Visa or MasterCard, you could use it to pay for goods and services without having to look for an ATM to withdraw cash.

Also, debit cards are useful when you want to transfer funds electronically. You could do so within the same bank. But you can also transfer funds from a bank account in one bank to a second account in a different bank. In addition, you could buy goods and services online with a debit card.

Choosing an ATM Card

If you are afraid of living beyond your means, accumulating debt and incurring interest, you should consider an ATM-only or ATM debit card. Both of them function based on the money you have in your account. The latter is a much better option because you can use it for online banking and payment of purchases without having to withdraw cash.

However, if you have no problems leveraging debt to achieve your goals and are disciplined enough to pay off what you owe, ATM credit cards are an excellent option, especially when you have minimal savings.