ATM card vs debit card? What's the difference?

ATM card vs debit card? What's the difference?

ATM and debit cards may look exactly the same, but each card has a different functionality that sets them apart. 

 

You can only use an ATM card to withdraw cash from ATMs (Automatic Teller Machines) and check your bank balance. Meanwhile, you can use a debit card to withdraw money from an ATM and check your balance, pay bills and make payments in-store, online and over the phone.

 

A debit card also offers extra peace of mind as you or your child don't always have to carry cash around.

 

At some point, your child may be offered an ATM card or a debit card by their bank, or you may consider setting them up with a prepaid debit card. 

In this guide, we'll help you explain the key differences between ATM cards and debit cards to your child, and understand the pros and cons of each, so you can decide which is the best option for your family.

 

What is an ATM card (and how to explain this to a child)?

 

An ATM card (also known as a cash card) is a PIN-based card issued by a bank or building society that your child can use to take out cash from their account at an ATM (cashpoint) at any time, so long as they have sufficient funds in their account.

 

However, they can’t use an ATM card to pay for goods or services in-store or online. You also can't use it to set up ApplePay. 

 

Banks usually offer youngsters an ATM card from 11 when they open a bank account. 

 

Other payment cards, such as credit, debit and prepaid debit cards, can also function as ATM cards.

 

Pros of an ATM card

 

  • You can withdraw cash from your account at an ATM 24/7
  • You can use an ATM card to pay in cash to your account
  • You can’t use an ATM card to access the bank's overdraft facility, so you can’t go overdrawn
  • With an ATM card, you can check your account balance
  • You can use an ATM card to withdraw cash while abroad
  • You can use an ATM card at most ATMs

 

Cons of an ATM card

 

  • An ATM card has limited features and can’t be used to pay for goods or services
  • An ATM card can’t be used to purchase items or services online
  • You can’t set up ApplePay with an ATM card
  • Some ATM machines will charge you to withdraw cash
  • Some ATM cards have a maximum daily withdrawal limit

 

What is a debit card (and how to explain this to a child)?

 

You can use a debit card to pay for goods and services online and in shops that accept your card's payment network, such as Mastercard, Visa, and Maestro. You can also use it to withdraw money at ATMs. 

 

The money is automatically withdrawn from your account. The card can also be used to access internet banking services and make payments abroad. 

Many debit cards are now contactless, so you don't have to enter your PIN if the payment is under £100. 

 

Most highstreet banks will offer debit cards to children from 11 years old.

 

What are prepaid debit cards?

 

Prepaid debit cards like GoHenry are a type of debit card where you preload money onto the card, which parents can do by transferring funds from their bank account.

 

Once the money is loaded onto the card, a child can use it just like a regular debit card but without having to open a traditional bank account. 

However, with a GoHenry prepaid debit card, some restrictions are in place to protect kids. 

 

For instance, they can't use their card at adult entertainment venues, casinos and tobacco and alcohol retailers. 

 

Kids can also safely use their cards without worrying about overspending or getting into debt. 

 

Parents can use the accompanying mobile app to set spending limits, track transactions and set up paid tasks.

 

Pros of a debit card

 

  • You can withdraw cash from an ATM 24/7
  • Your debit card can be used to pay for goods and services
  • You don't have to worry about carrying cash
  • It can help you learn how to manage your money
  • You can use contactless payment in stores
  • You can use a debit card to set up ApplePay on your phone
  • Most debit cards can be used abroad
  • You can use a debit card to check your balance at an ATM or pay in cash to your account
  • You can use your debit card to access internet banking services
  • You can use a debit card to pay bills or recharge your phone
  • With some accounts, you can use your debit card to access your bank's overdraft facility
  • Debit cards usually offer a higher daily withdrawal limit
  • Prepaid debit cards like GoHenry's link to a mobile app so parents can add money, monitor spending and set spending limits

 

Cons of a debit card

 

  • Kids often have to wait until they turn 11 to get a debit card unless they have a GoHenry prepaid debit card which is available from the age of six
  • You need to take good care of your debit card to avoid someone stealing it and using it to make contactless payments
  • If the account has an overdraft facility, you will be charged if you become overdrawn
  • With a debit card, it can sometimes be easier to overspend than just only using cash

 

What is the key difference between an ATM card and a debit card?

 

The difference between an ATM card and a debit card is how you can use them. 

 

The function of an ATM card is to withdraw cash at an ATM and enable you to check your balance. 

 

However, a debit card offers many more functions alongside the ability to withdraw cash. 

 

Unlike an ATM card, you can use it to make in-store and online purchases and bill payments.

 

Is an ATM or debit card best for my child?

 

Whether an ATM or debit card is best for your child largely depends on them and what you would like them to learn from using these cards.

 

With an ATM card, your child can track their spending, know how much money they have in their account and how much they take out each time. 

With a debit card, your child can learn much more about how to pay for goods and services and keep track of their spending using an app.

 

Children typically start developing attitudes and skills around money in early childhood. So, many parents find that a GoHenry prepaid debit card for kids is an effective way to help youngsters learn about money and take financial responsibility. It can help them build their financial knowledge and independence with peace of mind that your children are protected.

 

If you think your child is ready for their first ATM or debit card, try the GoHenry prepaid debit card. Not only will it help your child learn financial responsibility and independence, but our Money Missions also offers bite-sized lessons on everything to do with money, from budgeting and spending wisely to saving habits and investments.

 

Get started today by downloading our free app or visiting the website.

 

 

Related articles

 

Activities to teach your kids financial literacy

 

How to teach kids the value of money

 

Financial literacy resources for children

 

Financial milestones for kids

 

How old do you have to be to get a credit card?

 

What age can you get a debit card?

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Written by GoHenry Published Dec 6, 2022 ● 3 min. read