Why your credit card isn’t a credit card

It may come as a surprise, a disappointment even, but you don’t have a credit card with Qonto. In fact, the term ‘credit card’ is often misused and misunderstood.

Real credit cards are not very widespread in Europe. It’s a very British and American payment method that most European banks offer but which few Europeans use.

This fact is likely to beg two questions:

Now, some answers. 👇

As its name suggests, it’s a card that gives you credit. Literally.

Let’s take an example: you are going to Chicago on a business trip and have to buy a plane ticket, book a hotel room and pay for your meals.

With a credit card, each purchase you make is not debited from your bank account. In reality, they are all paid for by your bank, up to the limit you have set together.

It sounds like a great idea, don’t you think?

Except that at the end of the month, a few days after you get back from your trip, you receive a bill from your bank. It’s for everything you spent in Chicago as well as every other purchase you made with your credit card that month.

You now have to pay all that credit back.

So if your bank lends you money, it’s expecting you to pay the bill. And because this credit is renewable, the same thing happens the next month. And the next month. And the next. You get the picture.

With Qonto, you won’t receive this type of bill. We have never granted credit directly, although we can help you find credit through our partners, October.

In the meantime, we have to find out what type of card you have.

In the past, prepaid cards were often SIM cards that you could find in a variety of shops. Things have changed, however.

We are seeing prepaid payment cards pop up everywhere. They enable you to make as many card payments or withdrawals as necessary, as long as there’s enough money on them. You then have to top up your card to be able to use it again.

So, you might say that that’s exactly what you do with your Qonto card: you can spend the money you have in your current account. As long as that money’s there, it’s yours to spend.

But that’s where the main difference lies.

A prepaid card is not necessarily linked to a bank account.

In concrete terms, the money you have topped up on your card is only stored in an electronic wallet (which is sometimes called a payment account). This wallet is not therefore necessarily linked to an IBAN, for example. However, with Qonto, you have a bank account with all the services that go with it: SEPA transfers and direct debits, automated bookkeeping tools and invoicing solutions, for example.

Another thing: your Qonto card protects you against the risk of fraud, travel contingencies or work accidents, while most prepaid cards have no insurance.

So, your Qonto card is not a credit card and neither is it a prepaid card. There’s only one scenario remaining.

Even if we rarely call them by their real name, debit cards are the most widespread payment cards across Europe.

With each payment made with a debit card, the amount is debited directly from your bank account. Logical, right? This means that the transaction is only approved if you have the necessary funds, unless you have an authorized overdraft.

At Qonto, each amount spent is deducted straight from your business banking account, and you are automatically notified on your app. So what you have in your wallet is indeed a debit card.

For us, that’s the right balance: unlike credit cards, you keep control over your cash flow. At the same time, you enjoy the services and security that a business banking account offers, which a prepaid card cannot.

The question is now: ‘which debit card do you have?’ For the time being, we offer 3 very distinct cards: the One card, the Plus card and their premium cousin the Metal X Card.