ATM Cards vs Debit Cards: What’s the Difference?

By Ashley Kilroy · August 08, 2023 · 7 minute read

We’re here to help! First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey. We develop content that covers a variety of financial topics. Sometimes, that content may include information about products, features, or services that SoFi does not provide. We aim to break down complicated concepts, loop you in on the latest trends, and keep you up-to-date on the stuff you can use to help get your money right.

ATM Cards vs Debit Cards: What’s the Difference?

ATM cards and debit cards may look very similar, but they actually have very distinct functions: ATM cards allow you to withdraw or transfer money from your bank account when you need cash. A debit card, however, delivers the same benefits but has more bells and whistles. For example, you can use debit cards to pay bills or earn rewards for your spending habits. So, although many think debit cards and ATM cards are one and the same, they actually work differently.

Understanding how each card works ensures you make the most of your banking services. That said, here’s everything you need to know when comparing ATM cards vs. debit cards, including:

•   What is an ATM card?

•   How do ATM cards work?

•   What is a debit card?

•   How do debit cards work?

•   When should you use an ATM card vs. a debit card?

What Is an ATM Card?

An ATM card allows you to withdraw cash from these machines up to certain ATM withdrawal limits and transfer money between bank accounts.

However, the card has limited functionality. You cannot use it to make in-person or online purchases like you can with a debit card.

Worth noting: Those who hold money market accounts (which are a kind of savings account blended with some checking account features) often have ATM cards.

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How Do ATM Cards Work?

A bank links your ATM card to your account. When you use your ATM card at a machine, you enter your four-digit personal identification number (PIN) to access your account.

You can then use the ATM to view your account balance, withdraw cash, review recent transactions, and move money from one account to another. If you withdraw cash, you may have to pay a small ATM fee, depending on your bank and the machine you use.

What Is a Debit Card?

So, is a debit card the same as an ATM card? While they have similarities they are not the same.

Like an ATM card, your debit card links to your bank account and allows for cash withdrawal and checking account management. However, debit cards have higher withdrawal limits, meaning you can access more cash every day than with an ATM card. Generally, banks give debit cards to customers who have checking accounts.

A debit card is also a payment card. In other words, you can use your debit card at physical storefronts and shops to purchase goods and services. Likewise, your card enables you to make online purchases.

However, debit cards have purchase limits, meaning you can only conduct so many dollars’ worth of transactions per day. Usually, purchase limits range from a couple of hundred dollars to a few thousand dollars. Your limit depends on the bank or credit union that holds your account.

Recommended: What Is Cardless ATM Withdrawal?

How Do Debit Cards Work?

At an ATM, a debit card works identically to an ATM card: You enter your credit card PIN to manage and withdraw funds from your bank account. However, debit cards also allow you to forgo using cash. Instead, you can skip the ATM, go to the store, and use your debit card to make the purchase.

Your debit card will use your checking account to pay, making the transaction cashless. For security, you must use your PIN to complete a purchase.

By the same token, you can use a debit card online by entering your details when making a purchase on a website. This feature allows for electronic transactions where giving or receiving cash isn’t possible.

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Pros and Cons of ATM Cards

Here is a summary of the advantages and disadvantages of ATM cards to help you understand ATM cards vs. debit cards:

Pros of an ATM Card

Cons of an ATM Card

Quick access to your cash Your bank limits how much cash you can withdraw daily, restricting your purchasing capabilities
You can check your account balance Using an ATM out of your bank’s network will likely incur fees
You can move money between your accounts Losing your card means you can’t access your money
Your four-digit PIN prevents theft A thief might steal your card and guess your PIN correctly
You can review recent transactions

Pros and Cons of Debit Cards

This list of pros and cons of debit cards can help you see the difference between a debit card vs. an ATM card:

Pros of a Debit Card

Cons of a Debit Card

Same functionality as ATM card Debit card usage doesn’t build your credit history or score
PIN enhances account security Like an ATM card, a thief could steal it and guess your PIN
Linked to your checking account, enabling online banking You might be subject to ATM fees
Can transact physical and online purchases Daily spending limit
You can cancel or freeze a debit card if you lose it
You might receive reward points for transactions
Can complete international purchases

Recommended: Guide to Using a Credit Card Like a Debit Card

When to Use an ATM Card Over a Debit Card

ATM cards only let account holders transfer money to and from accounts. For this reason, an ATM card might be more suitable for those who only have an ATM card linked to their bank account and need to move money. For example, an ATM card is a good option if you have a money market account and need to withdraw or deposit funds.

When to Use a Debit Card Over an ATM Card

On the other hand, if you want to make purchases online and pay bills, you will need to use a debit card since ATM cards don’t have these capabilities. Plus, if you want access to your bank account while traveling abroad, you’ll need to use your debit card (for purchases, you might decide to get an international credit card as well). This is because ATM cards can only be used in the United States.

Deciding which card to use will really depend on which type of card is linked to your bank account and what type of transaction you’re trying to complete.

Can I Have Both a Debit and ATM Card?

It’s possible to have both an ATM card and a debit card. Of course, the type of cards you have depend on your bank, account type, and needs. But, if you have both, ensure you know which card is linked to which account. This way, you can be mindful of potential fees and overdrafting your account.

The Takeaway

When you need to deposit or withdraw cash from your checking, savings, or money market account, an ATM card can help you do just that. However, with an ATM card, you can’t complete other banking transactions like making purchases or paying bills. A debit card gives you the ability to do all of it. But, the card you use will depend on your bank’s offerings as well as your financial needs.

If you’re in the market for a new debit card, you can open a bank account with SoFi and enjoy many perks. For instance, you’ll have access to the global Allpoint Network of no-fee ATMs. In addition, you’ll enjoy spending and saving in one convenient place, earning a competitive Annual Percentage Yield (APY), and paying no account fees. All this can help you manage your money more easily and maybe even grow your funds faster.

Ready for better banking? Discover everything SoFi Checking and Savings has to offer.


Do you need an ATM card?

Not necessarily. Debit cards also give you access to ATMs to withdraw or deposit money.

Are debit cards more useful than ATM cards?

Yes, debit cards have more functionality than ATM cards. For example, you can make purchases and conduct internet banking with debit cards. ATM cards don’t allow you to do that.

What are the main differences between an ATM card and a debit card?

The primary difference between ATM and debit cards is that you can only use the ATM one to transfer money from your bank account via ATM or electronic transfer. A debit card does the same, but you can also make purchases in-store or online and use it for other internet banking services.

Photo credit: iStock/Nastasic

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