Can You Use an ATM Card for Purchases and Online Payment?

Pay With Plastic: Debit vs. ATM Cards

Retail placard with Visa, MasterCard, Discover, and American Express logos
••• PT Money

When you open a checking account, you typically get a free payment card to access your money. Those cards work for cash withdrawals, balance inquiries, and deposits at most ATMs. And most cards, known as debit cards or check cards, can also be used for purchases—both online and in person.

If you have a new card and you’re wondering what you can do with it, find out if it’s just an ATM card or if it’s a fully-functioning debit card.

Look for the logo: To determine if your card works for purchases, look for a payment logo on the card. For most cards, a Visa or MasterCard logo appears at the bottom-right corner of the card. Discover and American Express cards might show a logo somewhere else on the card. If there is no logo, you have an ATM card that’s only good for use at an ATM.

How to Use Your Card

If your card has a payment network logo, it's technically a debit card, and you can use it as if it was a credit card.

At a retailer, swipe the card (or insert the chip, if it’s a chip-enabled card) at the payment terminal. You can choose "Credit" or "Debit"—the money will come out of your checking account no matter what you choose.

When shopping online, punch in the 16-digit card number where the merchant asks for a credit card number. You’ll also need to provide your billing zip code and the security code on the back of your card.

For paying bills online, you have several options for funding payments from your checking account:

  1. Enter your card number with the biller as if you’re shopping online.
  2. Use your bank’s online bill payment system, and your bank will send funds electronically or print and mail a check.
  3. Provide your checking account information to the biller, who will pull funds from your bank when payment is due.

Debit cards vs. credit cards: Debit cards can be used almost anywhere in place of a credit card—the only exceptions might be for rental cars and hotel stays. In those situations, the amount of your final bill is unknown, so billers may require that you use a credit card. At the least, they’ll probably put a large authorization hold on your account, which can tie up funds in your checking account.

Debit Cards vs. ATM Cards

Most cards issued with checking accounts these days are fully-functioning debit cards. However, it’s not unheard of to have an ATM card that does not work as a debit card. In particular, if your bank account is savings account—as opposed to a checking account—then your card is most likely only good for ATM use. You should still be able to do the following at an ATM:

  • Withdraw cash
  • Make deposits at deposit-enabled ATMs
  • Find out how much money is in your account (known as a balance inquiry)
  • Transfer funds between accounts

Cards for savings accounts: Federal law limits how often you can withdraw funds from a savings account, but ATM withdrawals do not count against your limit. If you were to make a purchase with your card (or complete other types of withdrawal transactions), you’d be limited to six withdrawals from savings per month. To avoid problems, most banks just don’t provide debit cards for savings accounts. You get an ATM card instead.

Types of Cards

It might be helpful to compare and contrast several kinds of cards in one place. Doing so may help you understand what you currently have, and also find out what you might want to have instead.

ATM cards are the simplest type of card. Again, they can generally only be used at an ATM for basic banking transactions.

Debit cards, also known as check cards, allow you to spend from your checking account anywhere cards are accepted. They also do everything that ATM cards do. Whether you use the card to withdraw cash or make a purchase, the funds come directly from your checking account (usually within a few days).

Credit cards allow you to borrow from your credit card issuer. Funds do not come directly out of your checking account. Instead, you build up a loan balance that you pay off at a later date. It’s best to pay off the entire balance every month so that you don’t pay interest charges, but you can pay less if you need to—just be aware of the consequences. Credit cards are safer than debit cards for everyday spending because:

  1. Credit cards don’t pull directly from your checking account. If somebody steals your debit card or your card number, thieves can drain your checking account more or less immediately. When that happens, you might have a hard time paying bills like rent and utilities.
  2. Credit cards offer better consumer protection against fraud, limiting your losses to $50 under federal law. Debit cards also protect against fraud and errors, but you have to act quickly, and federal law is not as generous (to you) with debit cards.

    The drawback of credit cards is that you can quickly go into debt, and interest rates are often high. For more details, learn about the pros and cons of spending with debit and credit cards.

    Prepaid debit cards are similar to standard debit cards, but they don’t pull from a checking account. Instead, you “load” funds into your account with the card issuer by setting up direct deposit, adding funds with an electronic transfer or in-person deposit, or using mobile check deposit. Then, you spend from the card until you’ve used up the money you loaded. You can also withdraw cash at an ATM and pay bills online with many prepaid cards. You don’t rack up debt with prepaid cards, and they’re often easy to qualify for, making them attractive if you’ve had trouble opening a bank account.

    The main drawback to prepaid debit cards is that they can be expensive, and they’re not as useful as a fully-functioning bank account. If you’re hoping to (or forced to) live life without a bank account, prepaid cards can be a powerful tool. However, you’ll probably end up saving time and money if you get a checking account. Contact local banks and credit unions for the best chances of free checking.