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Debit Cards: Check and ATM Cards Pros and Cons

By Edited Oct 10, 2015 0 0

About Debit Cards

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Check and automatic teller machine (ATM) cards are different kinds of debit cards. Although debit cards look similar to credit cards, check and ATM cards do not have a credit card logo. Instead, debit cards contain the issuing institution's logo, such as the name of the bank or credit union. Besides check and ATM cards, debit cards also include an ATM/check combination card. Although all three types of debit cards are directly tied in to your checking or savings account, there are pros and cons associated with using each type of card.

Check Cards

Check cards contain a credit card logo as well as the issuing institution's logo. You can use a check card at any establishment that accepts MasterCard or Visa. Although a check card looks exactly like an ATM card, you cannot use it to withdraw funds or conduct any transactions at an ATM. The reason is that ATM transactions require a PIN, and check cards work like a credit card. You sign a transaction slip for each purchase. However, purchases are deducted instantly from your checking account and you don't carry a balance.

One disadvantage of having a check card is that if you lose it, anyone can use it and empty your checking account. Yes, tellers are suppose to verify the signature, but they generally do not.

ATM Cards

You can use your ATM card to make deposits, withdraw cash or transfer funds between accounts. You simply insert your card into an ATM and enter your PIN. The system verifies that you have sufficient funds before allowing any transactions to go through.

Not all merchants accept ATM card payments, but many do. Make sure that the merchant is set up with a point-of-sale terminal so you can enter your PIN to pay for your purchases.

You cannot use ATM cardsfor online purchases and you cannot use it as a credit card. However, if you happen to lose it or someone steals it, your funds are generally safe unless the thief has your PIN.

ATM/Check Card Combination

This type of debit cardoperates as both, ATM and check card, although some merchants limit its use to check card only. However, most merchants give you the option to choose between "credit" (check card) or "debit" (ATM). Choosing "debit" requires that you enter your PIN on the point-of-purchase terminal, while choosing "credit" only requires your signature.

Some retailers, like grocery stores, allow you to withdraw cash when you pay for your purchase. For instance, if the total for your groceries is $80 and you want to withdraw $20, you choose the option "Cash Back" and enter $20. The system deducts $100 from your account. Check with your bank or credit union to make sure that you can withdraw cash in this manner without incurring a fee.

Because you have the option to pay for "credit" transactions, you can generally use a combined ATM/check card at any establishment that accepts Visa or MasterCard, including restaurants and hotels.

Although this type of debit card is convenient and easy to use, if you lose it and don't report it right away, anyone can make "credit" purchases with it.

Well, there you have it. The difference between the three debit cards. Even though debit cards include ATM, check and ATM/check cards, each type of card has its advantages and disadvantages. Nonetheless, regardless of what card you use, all transactions are practically instantly deducted from your checking or savings account. Remember to keep track of your debit card transactions as if you were using your checkbook.

Copyright © 2011 Ana Jackson. All Rights Reserved. Reproduction in whole or in part constitutes plagiarism, is illegal and strictly prohibited.


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