3 FAQs: ATM Card vs. Debit Card vs. Credit Card (April 2024)

Having plastic in your wallet is almost a necessity these days. Not only is it convenient to be able to swipe or tap to make a payment for your everyday purchases, but some retailers require it. And if you do any shopping online, you’ll likely need to have some type of credit or debit card to complete a transaction.

Before you acquire your next piece of plastic, it’s important to know that not all card types are created equal. Below, we’ll dive more deeply into the differences between an ATM card vs. a debit card vs. a credit card — but first, here’s a quick look at the basics:

Now that we’ve covered the basics, let’s get into the nitty-gritty of each card type to help you decide which options may be most suited for your situation. Use these links to jump ahead to a specific card, or keep scrolling to read about all three. We’ll cover the similarities and differences between credit cards, ATM cards, and debit cards; take a look at some of our top picks for credit cards with the best perks; and provide information on how to decide which type of card is best for you.

Credit Cards | ATM Cards | Debit Cards

While credit cards appear very much like debit cards and ATM cards, they have a very different impact on your bottom line.

• Credit cards, unlike most debit or ATM cards, are the same as taking out a loan and require a bank or lending institution to review an application and approve you for creditworthiness. If you would have a hard time getting a loan, you may not be able to get a credit card.
• Just the act of applying for a credit card can affect your credit. When the financial institution pulls your credit report, your score can take a small, temporary hit. Too many applications can have a significantly negative outcome for your credit history.
• Having the right card, however, can set you up with the opportunity to make payments on time, increase your limits, and show creditworthiness. All of these will raise your score and make you eligible for even bigger and better card offers.
• There are added consumer protections that credit card holders may qualify for, including extended warranties and travel insurance. They also offer the best protection against fraud, and you will find credit card companies to be very helpful if you ever have to dispute a charge based on faulty or unacceptable service or product performance.
• While some banks are starting to offer small cash-back rewards for debit card usage, credit cards are still mostly responsible for the best perks and offers. Cash-back, frequent flyer miles, hotel stays, and big discounts can be given for responsible purchases and on-time payments.

Here are some of our expert’s top choices for credit cards with the best perks:

Bank of America® Customized Cash Rewards credit card

at Bank Of America'ssecure website

EXCELLENT CREDIT RATING

★★★★★

4.9

OVERALL RATING

4.9/5.0

Our Review »

• $200 online cash rewards bonus after you make at least $1,000 in purchases in the first 90 days of account opening.
• Earn 3% cash back in the category of your choice, automatic 2% at grocery stores and wholesale clubs (up to $2,500 in combined choice category/grocery store/wholesale club quarterly purchases) and unlimited 1% on all other purchases.
• Choose 3% cash back on gas and EV charging station, online shopping/cable/internet/phone plan/streaming, dining, travel, drug store/pharmacy or home improvement/furnishing purchases.
• If you're a Bank of America Preferred Rewards® member, you can earn 25%-75% more cash back on every purchase. That means you could earn 3.75%-5.25% cash back on purchases in your choice category.
• No annual fee and cash rewards don’t expire as long as your account remains open.
• 0% Intro APR for 15 billing cycles for purchases, and for any balance transfers made in the first 60 days. After the Intro APR offer ends, a Variable APR that’s currently 18.24% - 28.24% will apply. A 3% Intro balance transfer fee will apply for the first 60 days your account is open. After the Intro balance transfer fee offer ends, the fee for future balance transfers is 4%.
• Contactless Cards - The security of a chip card, with the convenience of a tap.
• This online only offer may not be available if you leave this page or if you visit a Bank of America financial center. You can take advantage of this offer when you apply now.

• See application, terms and details.

Intro (Purchases)	Intro (Transfers)	Regular APR	Annual Fee	Credit Needed
0% Intro APR for 15 billing cycles for purchases	0% Intro APR for 15 billing cycles for any balance transfers made in the first 60 days (Balance Transfer Fee 3% for 60 days from account opening, then 4%)	18.24% - 28.24% Variable APR on purchases and balance transfers	$0	Excellent/Good

Additional Disclosure: Bank of America is a CardRates advertiser.

Bank of America® Travel Rewards credit card

at Bank Of America'ssecure website

EXCELLENT CREDIT RATING

★★★★★

4.9

OVERALL RATING

4.9/5.0

Our Review »

• Earn unlimited 1.5 points per $1 spent on all purchases, with no annual fee and no foreign transaction fees and your points don't expire as long as your account remains open.
• 25,000 online bonus points after you make at least $1,000 in purchases in the first 90 days of account opening - that can be a $250 statement credit toward travel purchases.
• Use your card to book your trip how and where you want - you're not limited to specific websites with blackout dates or restrictions.
• Redeem points for a statement credit to pay for travel or dining purchases, such as flights, hotel stays, car and vacation rentals, baggage fees, and also at restaurants including takeout.
• 0% Intro APR for 15 billing cycles for purchases, and for any balance transfers made in the first 60 days. After the Intro APR offer ends, a Variable APR that’s currently 18.24% - 28.24% will apply. A 3% Intro balance transfer fee will apply for the first 60 days your account is open. After the Intro balance transfer fee offer ends, the fee for future balance transfers is 4%.
• If you're a Bank of America Preferred Rewards® member, you can earn 25%-75% more points on every purchase. That means instead of earning an unlimited 1.5 points for every $1, you could earn 1.87-2.62 points for every $1 you spend on purchases.
• Contactless Cards - The security of a chip card, with the convenience of a tap.
• This online only offer may not be available if you leave this page or if you visit a Bank of America financial center. You can take advantage of this offer when you apply now.

• See application, terms and details.

Intro (Purchases)	Intro (Transfers)	Regular APR	Annual Fee	Credit Needed
0% Intro APR for 15 billing cycles for purchases	0% Intro APR for 15 billing cycles for any balance transfers made in the first 60 days (Balance Transfer Fee 3% for 60 days from account opening, then 4%)	18.24% - 28.24% Variable APR on purchases and balance transfers	$0	Excellent/Good

Additional Disclosure: Bank of America is a CardRates advertiser.

Capital One VentureOne Rewards Credit Card

EXCELLENT CREDIT RATING

★★★★★

4.9

OVERALL RATING

4.9/5.0

Our Review »

• $0 annual fee and no foreign transaction fees
• Earn a bonus of 20,000 miles once you spend $500 on purchases within 3 months from account opening, equal to $200 in travel
• Earn unlimited 1.25X miles on every purchase, every day
• Miles won't expire for the life of the account and there's no limit to how many you can earn
• Earn 5X miles on hotels and rental cars booked through Capital One Travel, where you'll get Capital One's best prices on thousands of trip options
• Use your miles to get reimbursed for any travel purchase—or redeem by booking a trip through Capital One Travel

• See application, terms and details.

See Rates & Fees

Intro (Purchases)	Intro (Transfers)	Regular APR	Annual Fee	Credit Needed
0% for 15 months	0% for 15 months	19.99% - 29.99% (Variable)	$0	Excellent, Good

Capital One Quicksilver Cash Rewards Credit Card

EXCELLENT CREDIT RATING

★★★★★

4.9

OVERALL RATING

4.9/5.0

Our Review »

• Earn a one-time $200 cash bonus after you spend $500 on purchases within 3 months from account opening
• Earn unlimited 1.5% cash back on every purchase, every day
• $0 annual fee and no foreign transaction fees
• Enjoy up to 6 months of complimentary Uber One membership statement credits through 11/14/2024
• Earn unlimited 5% cash back on hotels and rental cars booked through Capital One Travel, where you'll get Capital One's best prices on thousands of trip options. Terms apply
• No rotating categories or sign-ups needed to earn cash rewards; plus, cash back won't expire for the life of the account and there's no limit to how much you can earn

• See application, terms and details.

See Rates & Fees

Intro (Purchases)	Intro (Transfers)	Regular APR	Annual Fee	Credit Needed
0% for 15 months	0% for 15 months	19.99% - 29.99% (Variable)	$0	Excellent, Good

Chase Sapphire Preferred® Card

at Chase'ssecure website

EXCELLENT CREDIT RATING

★★★★★

4.9

OVERALL RATING

4.9/5.0

Our Review »

• Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 when you redeem through Chase Travel℠.
• Enjoy benefits such as 5x on travel purchased through Chase Travel℠, 3x on dining, select streaming services and online groceries, 2x on all other travel purchases, 1x on all other purchases, $50 Annual Chase Travel Hotel Credit, plus more.
• Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Travel℠. For example, 60,000 points are worth $750 toward travel.
• Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
• Get complimentary access to DashPass which unlocks $0 delivery fees and lower service fees for a minimum of one year when you activate by December 31, 2024.
• Member FDIC

• See application, terms and details.

Intro (Purchases)	Intro (Transfers)	Regular APR	Annual Fee	Credit Needed
N/A	N/A	21.49%-28.49% Variable	$95	Good/Excellent

+See More of Our Favorite Rewards Cards

Before you go thinking that you could not possibly qualify for a credit card, it’s wise to check cards that are specific to your level of creditworthiness. Everyone has to start somewhere, and there are now credit cards available for all levels of credit, including no/limited credit, bad credit (, good credit (640-720), and excellent credit (720+).

This sounds like a no-brainer, but it really is important to realize that this type of card has only one, very specific purpose. It’s used to take out cash, and nothing more!

• Since the ATM card needs to access cash, it’s tied directly to the checking or savings account at your banking institution. If you don’t have an ATM card yet, it’s wise to ask for one.
• There’s no way to “float” funds with this type of card. Money is debited in real-time the moment you access the cash.
• Not a fan of fees? Unfortunately, most cash withdrawals will come with a cost. Sometimes, you can actually incur two fees: one from your financial institution and one from the owner of the ATM machine (if they are not the same).

A debit card can also be used as an ATM card, which we’ll explain in greater detail in the next key difference:

You can enjoy the convenience of paying with a credit card, even if you don’t have access to an actual line of credit like with a credit card, by using a debit card. Here are some important facts to know about debit cards:

• You’ll need your PIN (Personalized Identification Number) to complete your purchase. This is usually a 4-digit code that you want to make sure to memorize — and don’t ever write it anywhere on your debit card.
• Debit cards are tied to checking accounts, and you’ll see your funds deducted immediately upon making the purchase.
• If you don’t have enough cash in your account to cover your purchase, one of two things may happen. Depending on what authorization you’ve given your bank, you may be approved for a purchase to go through, which will be subject to the bank’s discretion and overdraft fees. If you do not have authorization for these purchases to be approved, expect the cashier to let you know that your card has been declined. Another option is to link your card to a checking account that has a savings account for overdraft protection. This may still result in fees, but will guarantee purchases go through, as long as there’s enough in your savings account to roll over.
• Sometimes, retailers will even allow you to ask for cash back on top of your purchase amount. Check with your bank before doing this, however, as some charge additional fees or will even categorize the purchase as an ATM transaction (resulting in even more fees!)
• Did you know that you may be able to run your card as a “credit” transaction? By skipping the PIN and running it as credit, you will need to sign for purchases, and charges could take a few days to go through. (This is only available on cards with the Visa or MasterCard logos.)

Though you can run your debit card as credit, you are still using your own money to pay for the purchase, unlike a credit card where you’re using the bank-issued line of credit.

Deciding whether to get a credit, ATM, or debit card is a very personal decision that will be made by looking at your own needs for purchases. If you will simply need to take cash from your own account, an ATM card will likely do. Flexibility with purchases at most retailers will require at least a debit card. For those who need access to additional funds, credit cards are the only way to go. As each has its own perks – and responsibilities – it’s best to be honest about what you want, but also what you can handle.