What’s the Difference between a Debit Card, a Credit Card and an ATM Card?


By Pam Reiss

How big is your wallet? It might be quite large due to the amount of plastic it holds.

Believe it or not, 78 percent of Americans carry $50 of cash or less on them at any given time. That’s because these days, virtually anything can be purchased with credit cards or debit cards. Should a consumer find him or herself in a pinch where a business doesn’t accept charge cards, that person could always find the nearest ATM and take out some cash.

But what is the difference between all of those kinds of cards anyway? Let’s take a look:

An ATM card is usually issued by your financial institution. The card allows you to take money from your savings account or checking account from an ATM, depending on which account it’s linked with. Generally speaking, you can use your ATM card to withdraw money from any ATM machine. But be careful: Some of those withdrawals will cost you. If an ATM machine is not part of your bank’s network, there’s a good chance you’re going to have to pay a fee to access your money. Because The Milford Bank is a member of the Allpoint ATM Network, our customers are able to withdraw money from one of 55,000 machines across the world with no fees. You can find more information about that here.

• A debit card—also known as a check card—is linked with your checking account and generally has a Visa or MasterCard logo on it. As such, you can use these kinds of cards anywhere credit cards are accepted. It’s important you realize that debit cards are not credit cards, as the money that they draw from is the money that is on deposit in your bank account. Because you’re using your own money to make purchases you don’t have to pay interest on the things you buy with your debit card. But it’s important that you remember to keep track of how much money you have in your account because it is possible to spend more money than you have in your accounts, causing you to overdraw your account. .

• A credit card allows you to purchase things with a lender—like American Express, Visa or MasterCard—fronting you the money. The lender charges the merchant a per-dollar percentage on each transaction. They will also charge you interest if you carry a balance on your account. . Depending on your credit history, your credit limit may vary. The better your history, generally speaking, the higher your limit.

Different kinds of cards are the preferred method of payment for different kinds of people. There are some people who will only buy things with cash. When you pay with cash, you know exactly how much of it you have in your wallet so you don’t risk spending more than you have.

Other people turn to debit cards because they don’t like having cash on their person in case they lose their wallet, for example. On top of that, you don’t have to worry about carrying a high balance—though you might have to worry about overdrawing your account if you’re not careful.

Because of the freedom and rewards that come with some credit cards, many people feel comfortable buying with them. It is important to try and pay your credit card balance in full each month, however, if you wish to avoid hefty interest rates.

What is your favorite banking card to use and why? Keep the conversation going in the comments section below!

8 replies
    • Lynn Viesti
      Lynn Viesti says:

      Hi there Amresh,

      ATM Cards, Debit Cards and Credit Cards are all different from each other.

      ATM Cards do not have a Visa or MasterCard logo and may only be used in ATM Machines.

      Debit Cards do have a Visa or MasteCard logo and are tied to your bank account. When you use it to make purchases, the funds are deducted from your balance.

      Credit Cards also have a logo, such as MasterCard or Visa. They are generally not tied to an account. Instead, when the card is used, the purchase is applied to a line of credit or loan balance.

      If you’d like more information about the products or services we offer, please feel free to call us at 203-783-5700.

  1. E
    E says:

    There was a site you can go and get gift cards for money spent on you Debit Card for Milford Bank and I am not able to find that site at all.

  2. Geo
    Geo says:

    what is the difference of e wallet and bank card? What if my bank card has a mastercard logo, can you consider it as an e wallet also?

    • Rebecca Tudor
      Rebecca Tudor says:

      Hi Geo, An e-wallet, or electronic wallet (sometimes called a digital wallet) keeps credit cards and debit cards digitally stored on your smartphone. Apple Pay, Samsung Pay, and Paypal are examples of digital wallet apps. A bank card and e-wallet are not the same things. However, many e-wallet systems are able to store your bank card (debit card). Let us know if you have additional questions.

Comments are closed.