Why are There Different Types of Debit Cards?


If you are in the market for a debit card, you may not have realized that there are several different kinds to choose from. If you want to explore the full range of financial offerings, you may want to consider the different types of debit cards and which one would best meet your needs for your specific situation.

As you discover all of the options that are available, consider what you will be using your debit card for most, and all of the characteristics you would prefer in a debit card. This will make choosing your next debit card that much easier. Here are the different types of debit cards and why they exist:

Traditional Debit Card

When you initially think of a debit card, the first type that probably comes to mind is the traditional debit card. A traditional debit card is generally linked to your checking account (or a money market account).

This debit card allows you to make payments straight from your account, both in person and online. This allows the convenience of a credit card, but with using money that is currently available to you in your account. If you are looking for the basic debit card that you would normally picture when someone says “debit card,” this is your pick.

ATM-Only Debit Card

As the name implies, this type of debit card allows you to make withdrawals from your linked account from an ATM. Like a traditional debit card, an ATM-only debit card can be linked to a checking or money market account.

Unlike a traditional debit card, the ATM-only debit card clearly has some limitations. Instead of being able to use your debit card to make purchases with money directly from your account, an ATM-only debit card only allows you to make withdrawals from your account at an ATM. 

Another difference is that some ATM-only debit cards can be linked to certain savings accounts. If you need a means to withdraw money from an ATM, and that is the only reason you will utilize your debit card, this is the card for you.

Prepaid Debit Card

A prepaid debit card is not linked to a traditional account like a traditional debit card is linked to your checking or money market account. A prepaid debit card is linked to an account that you prefill with a fixed amount of money, giving in the name “prepaid.”

Depending on the prepaid debit card that you get, there may be several options to load the account linked to the card, some of which may result in a fee. And while some prepaid debit cards allow for overdrafting, not all do, so you need to be aware of what is left in the account. This is a good option if you are looking to spend a specific amount of money, or otherwise do not want a debit card linked to your personal bank accounts for some reason.

Overall, there are several types of debit cards, all of which allow you to access your money in different ways and possibly from different accounts. Choose your preferred type of debit cards based on your needs at the time.

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