Are debit cards & ATM cards the same thing?

The Future of ATMs
The Future of ATMs

You may think of ATM cards and debit cards as the "you say tomato, I say tomato" of personal finance.

And, at one point, they may have been considered the same thing. But, nowadays, there's an important distinction between the two.

"An ATM card is used at an ATM machine to get money," Jason Oxman, CEO of the Electronic Transaction Association, said. "A debit card is used at a store to buy goods or a service."

ATM Ancestry

It's easy to see why people may get confused. For starters, ATM, or automated teller machine, cards, were essentially the precursor to the modern-day debit cards. According to a report from the World Economic Forum, the patent for an early cash dispenser was filed back in 1960; ATM machines became operational later that decade and the first official debit card debuted in 1972, though, notably, it was called the ATM account debit card from City National Bank of Cleveland.

ATM cards were designed originally to do one thing: instead of going to the bank to get money, you could take cash out of your checking account via a machine. These machines were connected by regional networks (Think STAR, NYCE or SHAZAM), so that, while the cards were issued by banks, they could be used to withdraw money anywhere there was a machine, Oxman said. (Similarly to today, it was up to the financial institution to determine for what fee.)

Overtime, regional ATM networks went looking for more traffic — or, more pointedly new revenue streams — established relationships with retailers and evolved into the national debit networks of today, which, of course, include Visa and MasterCard.

According to MasterCard, the first debit purchase at the point of sale (using an ATM card and personal identification number, or PIN) occurred in the 1980s, and the first debit transaction authorized by a signature rather than a PIN was processed in 1988.

The Debit Card Today

Modern-day debit cards allow people to make purchases in stores and online using the funds in their checking account (as opposed to with a line of credit issued by the financial institution, a la credit cards.) Most people have a debit card that also functions at ATMs, though "no bank would give you a debit card and call it an ATM card," Oxman said.

You can generally get a financial institution to issue a card that only works at ATMs, if you didn't want your card to be usable at a store. And it would look very similar to a debit card with one very important difference — you wouldn't see a Visa, MasterCard or other network logo on its face. The logo is what indicates a card's acceptance at merchants.

Still, straight ATMs card are increasingly becoming obsolete. In addition to being steadily replaced by the more functional debit card, ATM cards could now be replaced by your phone, with new tech making it possible to take money out of your bank account with just your smart device. Some major banks are testing out contactless or eATMs that either use a radio chip inside your phone or a one-time code text from your bank to tell the machine to fork over some cash.

Keeping Accounts Safe

Whatever payment method you elect to use, it's an important to keep a close eye on financial accounts. You'll want to avoid overdraft fees or bounced checks and readily spot fraud. If you do find authorized charges or ATM withdrawals on your bank statements, contact your issuer to dispute them and have your card(s) replaced. And, if you ever have reason to believe your personal information was compromised alongside your payment cards, monitor your credit. A sudden drop in scores, for instance, is a sign your identity has been stolen. (You can view your credit scores for free each month on

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