Understanding ATM Cards and Debit Cards
Ever wonder what the difference between an “ATM card” and a “debit card” is? Ever wonder whether it’s safe to use a debit card for online purchases? Here are answers to these and other questions about ATM and debit cards.
When you find a new bank that allows you to open an account even if you are on the ChexSystems list, (or after you get off the ChexSystems list and find a great bank), you will need to understand ATM cards and debit cards. There is a difference!
ATM cards are generally only used to withdraw or deposit funds into your bank account through an Automated Teller Machine (ATM). You can usually tell if a card is an ATM card if it does not have a Visa or MasterCard logo on it (it will probably just have your bank’s logo on it).
A debit card will usually have a Visa or MasterCard logo on it. With a debit card and personal identification number (PIN), you can use an Automated Teller Machine (ATM) to withdraw cash, make deposits, or transfer funds between accounts. Some ATMs charge a fee if you are not a member of the ATM network or are making a transaction at a remote location.
Retail purchases can also be made with a debit card. You enter your PIN or sign for the purchase. Some banks charge customers a fee for debit card purchases made with a PIN. Although a debit card looks like a credit card, the money for the purchase is transferred immediately from your bank account to the store’s account. When you use a debit card, federal law also does not give you the right to stop payment. You must resolve the problem with the seller.
If you suspect your debit card has been lost or stolen, immediately call the card issuer. Many companies have toll-free numbers and a 24-hour service to deal with such emergencies. While federal law limits your liability for a lost or stolen credit card to $50, your liability for unauthorized use of your ATM or debit card can be much greater, depending on how quickly you report the loss.
If you report a debit card missing before it is used, you are not responsible for any unauthorized withdrawals.
Your liability is limited to $50 if you report the loss within two business days after you realize your debit card is missing and to $500 if you report the loss after two but before 60 days.
If you have not reported an unauthorized use of a debit or ATM card 60 days after your bank mails the statement documenting the unauthorized use, you could lose all the money in your bank account as well as the unused portion of your line of credit established for overdrafts.
Check the policies of your card issuer. Some offer more generous limits on a voluntary basis.
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{ 2 comments… read them below or add one }
In my online bank statement/activity, there is an transaction entry which describes it as, “ATM DEBIT”, and immediately to its left, it says, “Misc. Debit (which falls under TYPE)”.
On the other hand, there is also another transaction entry which describes it as, “ATM WITHDRAWAL”.
I assume these are both ATM transactions. But what is the difference ?
Hi Salvador –
What is the amount of the entry for “Misc. Debit”? Is it a small amount like $0.50 or $0.95? If so, it might be an ATM balance inquiry fee.