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My Money - Banking It
About Those Cards |
What's the difference between a debit card, an ATM card, and a credit card?
- Debit card. Debit cards look like credit cards, but are really "plastic checks." So using a debit card is like writing a check from your checking account. You give the debit card to a store clerk to buy something, and the money is deducted from your checking account balance immediately. Be sure to write down in your checkbook register every time you use a debit card, and subtract the amount from your checking account balance. If you spend more than you have, the bank will charge you a fee!
- ATM card. You can use ATM cards to get cash from your checking or savings account at an Automated Teller Machine (ATM) 24 hours a day, seven days a week. You also can deposit money into your bank account at an ATM. Some ATMs charge a fee every time you use them, so look for ATMs from your bank or ones that don't charge a fee. Be sure to subtract the amount you take out of the ATM (and the fee, if any) from your account balance.
- Credit card. Using a credit card is like taking out a loan to buy something. You'll get a bill for the item later, and if you don't pay the full amount you owe, the credit card company will charge you interest on the money you have borrowed. Credit cards can get you into debt very fast if you aren't careful. To learn more about credit cards, go to.
Important Tip: When you get an ATM or debit card, you'll choose or receive a personal identification number (PIN). This is like a password, so don't share it with anyone, and don't write the number on your card. In addition, make sure your PIN does not reveal anything about you, such as your birth date, Social Security number, etc., that could make it an easy target for identity theft.
Test your knowledge:
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| 1. You are out on Saturday afternoon, and the bank is closed. You need some cash. You use: |
A. A debit card
B. An ATM card
C. A credit card
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| 2. You want to pay for a movie, but the theatre can't accept a check and you don't have enough cash with you. You use: |
A. A debit card
B. An ATM card
C. A credit card
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| 3. Your car breaks down and you don't have enough money to get it fixed right now, but you need it to get to work. You use: |
A. A debit card
B. An ATM card
C. A credit card |
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Answers: 1. B; 2. A; 3. C
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