Abstract: A telephone data terminal and data collection network for communicating data over a telephone system using DTMF tone dialing. A telephone data terminal (10) includes an optical bar code reader wand (16) and a slot (22) in which a magnetic field sensor is disposed for reading variations in magnetic field intensity on a magnetic strip (24) applied to a card (24). Data encoded as a bar code, or stored in the magnetic strip, are converted to ASCII data by a CPU (50), and are transmitted either as a DTMF signal to a remote location over the telephone system, or as a data link signal that is incompatible with the telephone system, to a data processor (252). The telephone data terminal can be operated in either a voice prompted data collection mode or a display prompted data collection mode. It includes a two-by-twenty character alphanumeric LCD display (14) in which a prompt message is displayed to a user.