What's the difference between debit and credit cards?

What you need to know in advance

Mollie offers a virtual debit Mastercard as part of the Mollie Business Account. There are differences between debit cards, credit cards and pre-paid cards. This article will outline the differences and what that means for the Mollie card product.

What are the differences between debit, credit and pre-paid cards?

Debit card: A payment card that is directly linked to the balance available in the cardholder’s bank account. When making a purchase, the money is deducted directly from the current balance available in the bank account.
Credit card: A payment card that allows the cardholder to borrow money from the issuer of the card. This is a line of credit that constitutes a loan from the issuer to the cardholder and is paid back at a later date (typically monthly).
Pre-paid card: A top-up payment card that allows the cardholder to top-up a fixed amount of money onto the card to make purchases. It is neither directly connected to a bank account or considered a line of credit. It is not possible to spend more than the amount of money pre-loaded onto the card.

The table below outlines the main characteristics of each card type.

Debit card	Credit card	Pre-paid card
Directly linked to your bank account, using the existing balance when making a purchase	Borrow money from the card issuer and accrue an outstanding balance with each purchase, that is paid back later	You load a fixed amount onto the card and purchases are directly subtracted from the pre-loaded balance. Card balance is not linked directly to your account
Easier eligibility terms and minimises debt risk	Offers extra spending flexibility but increases debt risk	No debt risk but limits spending flexibility
Borrowing can sometimes be accessed via an overdraft facility but generally balance is not allowed to go into negative	Nature of a credit card means money is being borrowed instantly, which increases risk if you are unable to pay back your outstanding balance	Borrowing is not possible since balance is directly associated with the amount topped up. Often don’t require any credit checks to be eligible for one

What type of card does Mollie offer?

Mollie offers a virtual debit card that can be used to make purchases online using virtual card details or in-store using Apple or Google Pay. Since Mollie does not offer an overdraft facility on the business account at this time, this means that a positive available balance is required in your Mollie business account in order to make purchases using your debit card.

Mollie does not currently offer credit cards or pre-paid cards.