Cryptocurrencies are nifty digital assets that are well-known for investing; however, in recent years, they have become popular for commercial purposes as well. If you are wondering how, the answer is cryptocurrency credit cards! Crypto credit cards as well as debit cards now let you undertake seamless transactions without logging into your digital wallets every time.
Do you know what it means? You can buy a cup of coffee or croissant from your favorite cafe and earn rewards on your purchases. The applications are much more significant than this, but the essence is that you can use your crypto credit card for your regular purchases. The transactions through these cards are settled in fiat currency, and you receive a monthly statement to track your purchases across different mediums.
We hope that this teaser was interesting for you. Now that we have got your interest, let’s learn more about crypto credit cards, crypto rewards, transaction fees, and other aspects you need to know. But before jumping onto the crypto credit card train, we hope you have invested in crypto; if not, check out Coin Sets by Mudrex. An index-style investment tool for cryptocurrencies.
What Is a Crypto Credit Card?
A crypto credit card is a credit card that provides rewards in the form of cryptocurrency instead of cash back or points. These cards have the same functions as normal credit cards. You get a credit limit that you have to adhere to for crypto cards, too. The amount you spend using these cards has to be paid back within a time limit, and you also receive a credit statement for the same.
These credit cards are usually owned jointly by a bank and a crypto platform, for example, BlockFi Rewards Visa® Signature Credit Card. While a bank issues this credit card, it is marketed by a crypto exchange, token company, or investment company. You need to link your crypto wallet to receive rewards in crypto. Once the transaction is done, the crypto rewards earned will reflect in your digital wallet.
Both traditional and modern companies are now looking to penetrate the crypto audience and expand their customer base to go beyond the means of traditional banking and embrace new trends and technology in the market. This provides a great opportunity for crypto platforms and exchanges to cobrand and issue an array of credit and debit cards to allow earning rewards beyond travel miles or gift cards.
How Do Crypto Credit Cards Work?
When you acquire a crypto credit card, you’ll be able to make purchases the same way you can via a normal bank credit card. The only difference is the rewards in crypto credit cards can be exchanged for crypto tokens or be awarded in the form of crypto coins itself. This is not the case with normal credit cards, as the form of rewards is limited.
For example, a Gemini credit card deposits your crypto reward into your account associated with the Gemini platform on each transaction. This way—you have instant access to your rewards and won’t have to wait till the month’s end to use them.
When you’re choosing a crypto credit card, you need to define your goals and compare different cards to choose the one with the maximum rewards. Alternatively, you can also get a crypto debit card to make purchases. Some of the popular cards are available on Crypto.com and Coinbase. However, remember that you still have a credit limit and need to pay off your credit card dues each month without delay to avoid interest fees and extra charges.
Crypto credit cards, like normal credit cards, impact your credit score. Thus, if you’re punctual with your payments, your score will increase, and delays will result in lower scores which soil your financial reputation for further credit requirements.
Tip: A credit score of 700 and above is considered good, so try to maintain that.
What Are the Benefits of Using a Crypto Credit Card?
You can gain the following two main benefits from using a crypto credit card.
1. Investing in crypto’s positive potential value
You earn rewards in your crypto wallet or also get cryptos as a reward. This allows you to benefit from investing in cryptos without having to spend your money on them. Since cryptocurrency is volatile, you can use your rewards to enter the market at a dip and benefit when the price rises. All these without putting money out of your pockets. This is a great benefit if you are just starting your journey as you get to experience the market before making an investment.
2. Flexibility to convert rewards into tokens
Your crypto rewards get stored in your wallet, which you can use at any time as you see fit. You can easily convert this reward into different tokens like Bitcoin, Ethereum, and more by exchanging them for the tokens. Based on the credit card, you have the choice to choose your preferred token. What more can you ask for, right?
However, you also need to consider the taxation part of crypto credit cards. The rewards are yet to be considered for taxes, but any cryptos you buy or sell using this reward and the gain/loss have to be reported. Since crypto credit cards are a fairly new mode of exchange, countries are still debating the policies and taxes that have to be implemented.
Things to Consider While Choosing the Right Card Crypto Card
The below steps will help you make a decision to choose the right type of crypto credit card.
1. Always conduct research
You cannot buy the first credit card you see; researching has no alternative. Thus, research websites like Coindesk, CryptoWatch, CoinmarketCap, etc., before you apply for a card. It’s important to understand that the rewards you get are directly proportional to the volatility in the market. Thus choose the coins that provide flexibility and maximum rewards.
2. Compare different crypto credit cards
Comparing different credit cards on the basis of higher rewards, excellent compatibility, varied cryptocurrency options, and good rates is crucial. You should conduct an analysis study of the new offers and specifics offered by different cards, compare them against the value of coins you hold in your digital wallet, and select the best one.
3. Consider the fees
The fees for some crypto credit cards can be very high, but if you do a thorough study, you will find out that cards like Crypto.com offer the crypto credit card for free to CRO token holders. In the same way, you will find that certain coins in your wallet can make you eligible for concessions on purchases and impose zero fees for specific partners. Considering credit card fees is important as if it is too high, you may not get any real benefits.
4. Check the reviews
You should leverage customer reviews for your final decision to get a crypto credit card. Scan through the websites, ask fellow credit holders if possible, and choose the cards that have the best user experience and rewards as well. Reviews are important because they help you acquire a real-time picture of the benefits that the card claims. You can get a clear idea of how genuine a card is or whether it is just a tactic to swoon customers.
5. Apply for the card
Once you settle down on a card, check the application process and apply for it. Usually, this process can be done online. Like for a normal credit card, you will be asked for your ID, some documents, your digital wallet information, and more.
How to Apply for and Obtain a Crypto card?
The process of applying for a credit card is mostly the same as obtaining any other credit card. First, you have to fill out an application; the bank/crypto company will use your financial history and credit score to deem you a responsible cardholder. Once your request is approved, your credit card will be mailed to your address.
Before applying for a credit card, remember that you need a good credit score to qualify. Also, ensure that the card you are choosing does not have a very high fee. Once you receive the card and activate it, you can use it anywhere you want.
Few Examples of Crypto Cards Available Now
While many companies and crypto platforms are rolling out crypto cards, some of the prominent cards are as below.
Crypto credit cards
- Venmo Credit card: From the cash back on this card, you can purchase Bitcoin, Ethereum, Litecoin, or Bitcoin Cash.
- BlockFi Credit Card: This card allows you to obtain your crypto rewards in different crypto tokens like Ethereum, Bitcoin, etc.
- SoFi Credit Card: For each purchase, you will get SoFi rewards, and you can exchange it for Bitcoin or Ethereum.
- Brex Business Card: You can use the rewards from this card to invest in Ethereum or Bitcoin.
Crypto debit cards
Many crypto debit cards have a waitlist currently. However, the below two are open to joining.
- Coinbase Debit Card: This debit card provides rewards for eight types of crypto, including Dogecoin, Bitcoin, and Ethereum.
- Crypto.com Visa debit card: The rewards you get using this card are in the form of CRO, which is Crpyto.com’s cryptocurrency token.
Crypto Credit card Vs. Crypto Debit Card: What Is the Difference?
|Crypto Credit Card
|Crypto Debit Card
|When you spend using a crypto credit card, you will have a tallied monthly balance, and the rewards you get will be converted to a crypto coin. You will also pay interest and fees if your due balance is transferred to another month.
|Crypto debit cards like BitPay are directly connected to your digital wallet. Your card will be charged in crypto. You can use this card just like you use your normal debit card for different purposes.
|Your credit score is checked before you are deemed eligible.
|No credit check is implemented since it’s connected to your digital wallet.
|If you fail to make payments, your credit score also falls and reduces your credibility.
|This card allows you to make transactions through different tokens and spend cryptocurrency like fiat currency. Thus, there is no impact on your credit score or credibility.
Buying a crypto card is not a difficult decision if you are familiar with the cryptocurrency space and its potential. Research different crypto credit cards, compare, and choose the one offering the best deal. Also, make sure that you don’t overdo your purchases using these cards as you are the one paying back the due, and late payments will attract interest penalties.
1. What is the difference between a crypto credit card and a regular credit card?
A crypto credit card lets you make purchases like a normal credit card and earn rewards which you can convert into cryptocurrency as well. On the other hand, regular currency cards deal with fiat currency. The rewards you will receive in these cards are limited to gift cards, vouchers, travel miles, etc. While the application process for both cards is the same, you get cryptos as a reward for a crypto credit card.
2. Can you get a crypto credit card?
You can get a crypto credit card as long as you have a good credit score and a crypto wallet. All crypto credit cards usually have the insignia of Mastercard or Visa, so any place, restaurant, or merchant that accepts these cards, you can use them.
3. Which crypto card is best?
The ideal crypto card is the one that aligns with your spending goals, the token you hold in your crypto wallet, and suitable interest rates and fees. You should broaden your research horizon and compare different cards to choose the one that suits you the best and provides maximum rewards and benefits.
4. Can I use a crypto card at an ATM?
Yes, you can withdraw funds through your crypto credit cards through an ATM. For example, you can withdraw from your Crypto.com credit card from any ATM that bears a Visa or Visa Plus logo. However, be aware of the charges for ATM withdrawals on your crypto credit card.
5. How do I withdraw money from my crypto Visa card?
If your crypto card has a VISA or VISA Plus Logo, you can use it like a normal card to withdraw money from an ATM. You need to insert your card and enter the required details and amount to withdraw money.