What is the difference between ATM Card, Debit Card and Credit Card?

What is the difference between ATM Card, Debit Card and Credit Card

What is the difference between ATM Card, Debit Card and Credit Card?

 

ATM Card: An ATM Card is a pin based card & it is used in ATM only to withdraw Cash. ATM cards have a 4-digit PIN or a unique personal identification number that is linked to the bank account. Whenever, cash is withdrawn from ATM the balance gets deducted from the Bank Account. You cannot use your ATM card for any other purpose.

Thus, ATM Card & Debit Card are not the same. However, since Bank, nowadays issue ATM cum Debit card & that’s why you can use ATM Card as Debit Card for other purposes also

Debit Card: Debit Card is a multi-functional card that can be used in Shopping Mall, Restaurant, Online shopping, to pay bills, to make payments at POS terminals & much more. With Debit Card you can activate & use Internet Banking, Mobile Banking & UPI. With debit card you can withdraw cash also.
Debit Cards are connected to your Bank Account. Whenever, you transact with your debit card the amount gets directly deducted from your Bank account.

Credit Card: Credit Cards are used to buy now & pay later. Whenever, you do transactions or purchases with Credit Card you don’t require to pay the amount instantly but you are given a certain credit period for paying the amount. You have to pay your bank for your transactions or purchases within the specified credit period. If you don’t pay the amount within the certain period Interests are levied. Banks also charge some charges annually from the credit holders. However, with credit Card you can pay bills, use Internet banking, UPI & do all the transactions that we can do with Debit Card. 

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ATM Card vs Debit Card vs Credit Card:

The main difference between Credit & Debit Card/ATM card is that Debit Card/ATM Card are prepaid cards while Credit Cards are postpaid cards. The difference is quite similar like prepaid sim cards & post paid sim cards. For using services in Prepaid sim card at first, we have to pay & after that we can use the service. Alternatively, in post-paid sim cards we first use the service & pay later.

Similarly, in Debit Card/ATM Card we should have the amount available in our Bank account after that we can withdraw cash or pay utility bill, restaurant bill etc. Alternatively, in Credit card we use the service first & then pay the amount.

However, cash withdrawals from ATM with Credit Card attract an Interest & withdrawal fee. Also, there are certain types of websites that allow only Credit Cards for transactions. Apart from these the other facilities that Credit card provides is similar to that of Debit card.