> ## Documentation Index
> Fetch the complete documentation index at: https://developer.utgl.io/llms.txt
> Use this file to discover all available pages before exploring further.

# Card Account Modes

> Understand prepaid, asset-link, and fixed-limit card account modes and choose the right one for your use case

The Issuing API supports three card account modes: **prepaid**, **asset-link**, and **fixed-limit**. Each mode operates differently and is suited for different use cases. Understanding these modes helps you choose the right option for your business needs.

***

## Overview

Card account modes determine how funds are managed, how spending limits are set, and how repayments are handled. The mode is set when creating a card account and **cannot be changed** after creation.

| Mode            | Funding Method         | Credit Limit              | Repayment Method            | Best For                            |
| --------------- | ---------------------- | ------------------------- | --------------------------- | ----------------------------------- |
| **Prepaid**     | Direct top-up          | Balance-based             | N/A (pre-funded)            | Simple, quick setup                 |
| **Asset-Link**  | Backing account assets | Asset value-based         | Automatic asset liquidation | Multi-currency, flexible assets     |
| **Fixed-Limit** | Credit account         | Fixed predetermined limit | Settlement account          | Credit products, predictable limits |

***

## Prepaid Mode

Prepaid mode is the simplest card account type. Cards are pre-funded with the card account currency, and spending is deducted directly from the card account balance until funds are depleted.

### How It Works

```mermaid theme={null}
flowchart TD
    A[Create Prepaid Card Account] --> B[Fund Account]
    B --> C[Top-up from Source Account]
    C --> D[Card Account Balance Increases]
    D --> E[Cardholder Makes Purchase]
    E --> F{Sufficient Balance?}
    F -->|Yes| G[Deduct from Card Balance]
    F -->|No| H[Transaction Declined]
    G --> I[Balance Decreases]
    I --> J{Balance > 0?}
    J -->|Yes| E
    J -->|No| K[Top-up Required]
    K --> C
```

### Key Characteristics

* **Funding:** Direct top-up using the `/cardaccounts/topup` endpoint
* **Credit Limit:** Always zero (balance-based spending only)
* **Available Balance:** Equal to the card account balance
* **Repayment:** Not applicable (pre-funded model)
* **Currency:** Single currency (matches card account currency)

### Account Structure

```mermaid theme={null}
graph TD
    A[Source Account<br/>USD Balance: $10,000] -->|Top-up| B[Prepaid Card Account<br/>USD Balance: $1,000<br/>Limit: $0<br/>Available: $1,000]
    B -->|Spending| C[Card Transactions]
    style A fill:#9e9e9e,stroke:#616161,stroke-width:2px,color:#fff
    style B fill:#bdbdbd,stroke:#757575,stroke-width:2px,color:#000
    style C fill:#e0e0e0,stroke:#9e9e9e,stroke-width:2px,color:#000
```

### Benefits

* **Simple Setup** - No additional accounts or complex configurations required
* **Quick Implementation** - Fastest way to issue cards
* **Predictable** - Spending limited to available balance
* **No Credit Risk** - No outstanding balances or repayments

### Considerations

* **Manual Top-ups** - Requires regular funding to maintain spending ability
* **Single Currency** - Must match card account currency
* **No Credit Facility** - Cannot spend beyond available balance

### Use Cases

Prepaid mode is ideal for:

* **Gift cards** - Fixed value cards for recipients
* **Expense management** - Controlled spending with pre-allocated funds
* **Quick deployment** - Fast card issuance without complex setup
* **Budget control** - Strict spending limits based on available balance

### API Example

```json theme={null}
{
  "accountType": "prepaid",
  "currency": "USD",
  "cardholder": {
    "firstName": "John",
    "lastName": "Doe"
  }
}
```

**Top-up the account:**

```bash theme={null}
POST /cardaccounts/topup
{
  "accountId": "source-account-id",
  "cardAccountId": "card-account-id",
  "amount": 1000.00,
  "currency": "USD"
}
```

***

## Asset-Link Mode

Asset-link mode provides a credit facility backed by assets in a linked account. The credit limit is determined by the value of assets in the backing account, and repayments are automatically settled through asset liquidation.

### How It Works

```mermaid theme={null}
flowchart TD
    A[Create Asset-Link Card Account] --> B[Link Backing Account]
    B --> C[Fund Backing Account with Assets]
    C --> D[Credit Limit = Asset Value]
    D --> E[Cardholder Makes Purchase]
    E --> F{Within Credit Limit?}
    F -->|Yes| G[Authorize Transaction]
    F -->|No| H[Transaction Declined]
    G --> I[Outstanding Balance Increases]
    I --> J[Repayment Triggered]
    J --> K[Liquidate Assets from Backing Account]
    K --> L[Settle Outstanding Balance]
    L --> M[Credit Limit Restored]
    M --> E
```

### Key Characteristics

* **Funding:** Assets deposited into the backing account
* **Credit Limit:** Dynamically calculated from asset value in backing account
* **Available Balance:** Credit limit minus outstanding balance
* **Repayment:** Automatic asset liquidation when repayment is triggered
* **Currency:** Multi-currency support (assets can be in different currencies)

### Account Structure

```mermaid theme={null}
graph TD
    A[Backing Account<br/>BTC: 0.5 $20k<br/>ETH: 10 $15k<br/>USD: $5k<br/>Total: $40,000] -->|Backs Credit Limit| B[Asset-Link Card Account<br/>USD Balance: -$2,500<br/>Limit: $40,000<br/>Outstanding: $2,500<br/>Available: $37,500]
    B -->|Spending| C[Card Transactions]
    C -->|Repayment| D[Auto-liquidate Assets]
    D -->|Settle| B
    style A fill:#9e9e9e,stroke:#616161,stroke-width:2px,color:#fff
    style B fill:#bdbdbd,stroke:#757575,stroke-width:2px,color:#000
    style C fill:#e0e0e0,stroke:#9e9e9e,stroke-width:2px,color:#000
    style D fill:#757575,stroke:#616161,stroke-width:2px,color:#fff
```

### Benefits

* **Multi-Currency Assets** - Support for various asset types and currencies
* **Automatic Repayment** - Assets liquidated automatically when needed
* **Flexible Funding** - Use diverse assets (crypto, fiat, etc.)
* **Deferred Liquidation** - Assets remain in original form until repayment

### Considerations

* **Complex Setup** - Requires managing backing account and assets
* **Asset Volatility** - Credit limit fluctuates with asset values
* **Monitoring Required** - Track asset values to ensure sufficient backing
* **Liquidation Timing** - Asset conversion happens at repayment time

### Use Cases

Asset-link mode is ideal for:

* **Crypto-backed cards** - Use cryptocurrency holdings as credit backing
* **Multi-currency portfolios** - Leverage diverse asset holdings
* **Wealth management** - Access credit without liquidating investments
* **Flexible repayment** - Automatic settlement from asset portfolio

### API Example

```json theme={null}
{
  "accountType": "asset-link",
  "currency": "USD",
  "assetLink": {
    "accountId": "backing-account-id"
  },
  "cardholder": {
    "firstName": "Jane",
    "lastName": "Smith"
  }
}
```

**Fund the backing account:**

```bash theme={null}
POST /accounts/{accountId}/add-assets
{
  "assets": [
    {
      "currency": "BTC",
      "amount": "0.5"
    },
    {
      "currency": "USD",
      "amount": "10000"
    }
  ]
}
```

***

## Fixed-Limit Mode

Fixed-limit mode provides a predetermined credit limit that remains unchanged regardless of asset values. Repayments are settled through a designated settlement account rather than automatic asset liquidation.

### How It Works

```mermaid theme={null}
flowchart TD
    A[Create Fixed-Limit Card Account] --> B[Set Credit Limit]
    B --> C[Link Credit Account]
    C --> D[Link Settlement Account]
    D --> E[Credit Limit Active]
    E --> F[Cardholder Makes Purchase]
    F --> G{Within Credit Limit?}
    G -->|Yes| H[Authorize Transaction]
    G -->|No| I[Transaction Declined]
    H --> J[Outstanding Balance Increases]
    J --> K[Repayment Required]
    K --> L[Transfer from Settlement Account]
    L --> M[Outstanding Balance Cleared]
    M --> N[Credit Limit Restored]
    N --> F
```

### Key Characteristics

* **Funding:** Credit limit from credit account (not directly funded)
* **Credit Limit:** Fixed predetermined amount (set at creation)
* **Available Balance:** Credit limit minus outstanding balance
* **Repayment:** Manual transfer from settlement account
* **Currency:** Single currency (matches card account currency)

### Account Structure

```mermaid theme={null}
graph TD
    A[Credit Account<br/>USD Balance: $100,000<br/>Total limit source] -->|Provides Credit Limit| B[Fixed-Limit Card Account<br/>USD Balance: -$3,000<br/>Limit: $10,000 fixed<br/>Outstanding: $3,000<br/>Available: $7,000]
    B -->|Spending| C[Card Transactions]
    C -->|Repayment Required| D[Settlement Account<br/>USD Balance: $50,000<br/>Repayment source]
    D -->|Manual Transfer| B
    style A fill:#9e9e9e,stroke:#616161,stroke-width:2px,color:#fff
    style B fill:#bdbdbd,stroke:#757575,stroke-width:2px,color:#000
    style C fill:#e0e0e0,stroke:#9e9e9e,stroke-width:2px,color:#000
    style D fill:#757575,stroke:#616161,stroke-width:2px,color:#fff
```

### Benefits

* **Predictable Limits** - Fixed credit limit doesn't fluctuate
* **Stable Credit** - Not affected by asset value changes
* **Control Repayment** - Manual settlement timing and amount
* **Credit Products** - Suitable for traditional credit card products

### Considerations

* **Setup Complexity** - Requires credit account and settlement account
* **Manual Repayment** - Repayments must be initiated manually
* **Credit Account Limits** - Total limits across all cards cannot exceed credit account balance
* **Settlement Management** - Must maintain sufficient funds in settlement account

### Use Cases

Fixed-limit mode is ideal for:

* **Traditional credit cards** - Fixed credit limits like conventional cards
* **Credit products** - Predictable credit facilities
* **Corporate cards** - Controlled credit limits for employees
* **Stable credit lines** - Credit unaffected by asset volatility

### API Example

```json theme={null}
{
  "accountType": "fixed-limit",
  "currency": "USD",
  "limit": 10000,
  "creditAccount": ["credit-account-id"],
  "settlementAccount": "settlement-account-id",
  "cardholder": {
    "firstName": "Bob",
    "lastName": "Johnson"
  }
}
```

**Repay outstanding balance:**

```bash theme={null}
POST /cardaccounts/{cardAccountId}/repay
{
  "amount": 3000.00,
  "currency": "USD",
  "fromAccountId": "settlement-account-id"
}
```

***

## Mode Comparison

### Quick Decision Guide

**Choose Prepaid if:**

* You need the simplest setup
* You want to avoid credit risk
* You can manage regular top-ups
* You're issuing gift cards or prepaid cards

**Choose Asset-Link if:**

* Your clients have diverse asset portfolios
* You want automatic repayment from assets
* You need multi-currency support
* You want deferred asset liquidation

**Choose Fixed-Limit if:**

* You need predictable credit limits
* You're building traditional credit products
* You want manual control over repayments
* You need stable credit unaffected by asset values

### Detailed Comparison

| Feature               | Prepaid             | Asset-Link            | Fixed-Limit         |
| --------------------- | ------------------- | --------------------- | ------------------- |
| **Setup Complexity**  | Simple              | Complex               | Moderate            |
| **Credit Limit**      | Balance-based       | Asset value-based     | Fixed predetermined |
| **Funding Method**    | Direct top-up       | Asset deposit         | Credit account      |
| **Repayment**         | N/A                 | Automatic liquidation | Manual settlement   |
| **Multi-Currency**    | No                  | Yes                   | No                  |
| **Asset Flexibility** | No                  | Yes                   | No                  |
| **Limit Stability**   | Stable              | Volatile              | Stable              |
| **Credit Risk**       | None                | Moderate              | Moderate            |
| **Best For**          | Gift cards, prepaid | Crypto-backed, wealth | Traditional credit  |

***

## Account Balance Fields

Understanding balance fields helps you work with each mode correctly:

| Field         | Prepaid    | Asset-Link          | Fixed-Limit         | Description                                      |
| ------------- | ---------- | ------------------- | ------------------- | ------------------------------------------------ |
| `balance`     | Yes        | Yes                 | Yes                 | Current account balance (negative = outstanding) |
| `limit`       | Always `0` | Asset value         | Fixed amount        | Credit limit assigned                            |
| `outstanding` | N/A        | Yes                 | Yes                 | Amount owed (asset-link & fixed-limit only)      |
| `available`   | Balance    | Limit - Outstanding | Limit - Outstanding | Spendable amount                                 |

### Balance Examples

**Prepaid Account:**

```json theme={null}
{
  "balance": 500.00,
  "limit": 0,
  "available": 500.00,
  "outstanding": null
}
```

**Asset-Link Account:**

```json theme={null}
{
  "balance": -2500.00,
  "limit": 40000.00,
  "available": 37500.00,
  "outstanding": 2500.00
}
```

**Fixed-Limit Account:**

```json theme={null}
{
  "balance": -3000.00,
  "limit": 10000.00,
  "available": 7000.00,
  "outstanding": 3000.00
}
```

***

## Mode Selection Workflow

```mermaid theme={null}
flowchart TD
    A[Need to Issue Card?] --> B{What's your use case?}
    B -->|Gift/Prepaid Cards| C[Prepaid Mode]
    B -->|Crypto/Multi-Asset| D[Asset-Link Mode]
    B -->|Traditional Credit| E[Fixed-Limit Mode]
    C --> F[Simple Top-up Flow]
    D --> G[Asset Backing Flow]
    E --> H[Credit Account Setup]
    F --> I[Ready to Issue]
    G --> I
    H --> I
```

***

## Important Notes

<Warning>
  **Mode Cannot Be Changed:** The `accountType` is set when creating the card account and **cannot be modified** after creation. Choose carefully based on your long-term needs.
</Warning>

<Tip>
  **Check Balance Fields:** Use the `available` field to determine spendable amount. For prepaid accounts, `available` equals `balance`. For credit accounts, `available` = `limit` - `outstanding`.
</Tip>

***

## Next Steps

* Review [Creating Card Accounts](/issuing/api-reference/card-accounts/create-card-account) for API details
* Learn about [Top-up Operations](/issuing/api-reference/card-accounts/top-up-account) for prepaid accounts
* Understand [Balance Transfers](/issuing/api-reference/card-accounts/balance-transfer) for asset-link accounts
* Explore the [API Reference](/api-reference) for complete endpoint documentation