Over the decades, cryptocurrency has taken over the global economic market. As of 2021, there are 300 million identified cryptocurrency holders worldwide.
Up until recently, cryptocurrency was only used to invest for hold for a long period of time. However, times have changed. 75% of the US retailers are planning to accept crypto as a payment method.
Moreover, various global businesses and brands like Gucci, and Tesla are accepting crypto as a form of payment. This has led to the common query, how to spend the digital currency to buy real-life items?
Crypto credit cards and debit cards can help with seamless transactions and enable you to buy even a tiny cup of coffee. Here’s how.
The use of crypto credit and debit cards are growing every day. In the first fiscal quarter of 2022, Visa users made $2.5 billion in crypto-linked cards. Both credit and debit cards convert digital money into fiat currency for purchasing goods and availing services.
A crypto credit card is basically a “rewards credit card” that consists of crypto rewards against purchases instead of points or cash backs. These cards are similar to conventional credit cards. It credits the amount that you need to pay back to the bank by the end of the billing cycle.
Crypto credit cards are issued by a bank, however an investment company, or a crypto exchange markets the product. One of the popular crypto credit cards, BlockFi Credit Card is marketed by BlockFi, but issued by Evolve Bank And Trust.
Like any other credit card, a crypto rewards card can be used to make purchases. The only difference is, that with crypto credit cards you don’t earn travel rewards or cashbacks. On the contrary, any rewards won are used to purchase crypto and deposited in your account.
The type of cryptocurrency will depend on the crypto you choose. Every card has a set of cryptocurrencies. Some of these popular cryptocurrencies are Bitcoin, Dogecoin, Ethereum, Gemini Dollar, Litecoin, etc.
Here are some of the top crypto credit cards of 2022.
One of the much-awaited crypto credit cards in the market, BlockFi is extremely popular. The card offers a 2% cashback after spending $30,000 and an unlimited 1.5% back in crypto. To acquire monthly interests, all bitcoin rewards are added to the BlockFi account.
As a marketing strategy, the credit card also offers an additional ten dollars in bitcoin in exchange for successfully referring a friend. The card also launched offers for popular local merchants.
To maximize rewards, crypto.com is one of the best credit cards to use. The beginner’s card, ‘Midnight Blue’ is free of CRO (cryptocurrency of crypto.com). On all purchases, the users can avail of 1% back.
The beginner’s card is the best strategy to enlist users in the card. The real game begins when users invest in CRO with $400 and unlock the ‘Ruby steel card’. With this card, users can avail of 100% back on Spotify, and 2% back on rewards.
With more investment, the users can avail of the ‘Jade Green Level’, and ‘Royal Indigo’. They can earn extra rewards and exclusive merchandise welcome package.
Nexo card is the only credit card that saves you from monthly fees, common fees, annual fees, and no FX fees. It is the only card that doesn’t require you to sell, but lets you spend the crypto value.
Nexo card is accepted worldwide for its simple mechanism. The users can directly swipe the card and the money for the product will directly be deducted from its value. Moreover, every time you make a purchase with Nexo, you get an instant 2% cashback.
One of the common problems that crypto holders faced, was to transfer their crypto to debit cards in order to spend them. However, with crypto credit cards, the problem is solved.
Crypto debit cards act like ‘transactional debit cards’. The card functions like any other debit card, making it convenient to spend crypto to purchase products.
Earlier, a crypto holder had to go through several procedures, to be finally able to use the money. However, with a crypto debit card, they can now spend directly by swiping it.
Here’s how it works. Firstly, the crypto converts into fiat currency as per users’ choice and is added to the debit card. Once the money is processed, the purchases are made based on the particular fiat currency. Depending on the debit card, the rewards are presented in digital coins.
Here are some of the top crypto debit cards of 2022.
Coinbase has gathered popularity in the crypto community market. The visa card offers up to 4% cash back on purchases. One of the major challenges, crypto debit cards face, is the number of cryptocurrencies existing, and the ones compatible with the card.
However, coinbase offers a wide range of crypto support. The card can also be used to withdraw cash from ATMs.
BitPay is a popular addition to the crypto debit lifestyle. Although there are no reward programs, the card supports 13 cryptocurrencies, and charges zero money for ATM withdrawals.
The card offers extensive features and takes less time to reload compared to others in the market. The debit card was founded in 2011, long before crypto was widely accepted.
Binance is a globally acclaimed crypto exchange platform that offers its Visa debit card. On every purchase, Binance users can avail of up to 8% cashback on their purchases. ‘
Binance Visa supports a large number of cryptocurrencies and charges low fees. However, the card is restricted for US, and UK citizens, due to regulatory issues.
Despite its ability to earn rewards, and run on several major networks, crypto credit cards are quite distinct from crypto debit cards.
One of the major differences between credit and debit cards is that for crypto credit cards, the credit line is provided by the issuing institution. The cardholders need to pay back the amount. On the other hand, crypto debit cards, enable users to use their own funds and use their cards in exchange for fiat money.
Another major difference between the two is the ‘proof of stake obligation’, for many prepaid debit cards. Now, what is ‘proof of stake’? It is a contribution of coins to a particular blockchain network to support it. In exchange for providing membership, some crypto debit cards require ‘proof of stake’ as a requirement.
The blooming crypto community market might make owning crypto credit and crypto debit cards at your advantage. After all, who doesn’t want to save time from moving their money around?
Now that crypto is popular, people use it for daily items, and even during travels. The payments can now be easily made with crypto from the same accounts. Any exchange that issues these cards might be an added advantage and can replace your regular fiat money card with a crypto card.
Crypto debit cards offer an automated conversion from cryptocurrency to fiat, during purchases. For example, if you get paid in crypto, you can use it as a fiat from your bank account.
Crypto credit cards and debit cards have cashbacks and reward programs for every purchase. Although the numbers differ depending on the exchange, or the financial institution that issues these cards.
Crypto credit and debit cards have come a long way since their inception several years ago. Today, crypto ATM withdrawals are accepted worldwide. With global countries accepting cryptocurrency, it may become the future of finance. However, there are still a few things to be aware of, before delving into the rewarding crypto cards.
Volatility- Crypto market is extremely volatile. The rewards that you earn through credit and debit cards, may differ in value depending on the market situation.
Taxes- Usually cryptocurrency is considered to be a “property”, and liable for taxes. Every time you use a debit card or credit card for a purchase, you are required to pay taxes. Although there are no taxes levied on rewards, gains or losses in return for taxes need to be reported.
Limitations- Before availing of a crypto card, it is essential to check if your regional location supports or permits using it. For example, US citizens are not allowed to use Binance Visa due to restrictions on regulations.
With the ongoing crypto buzz in the financial market, it is best to avail of crypto credit and crypto debit cards and reap the benefits. Although the crypto market is bearish at the moment, it shows no sign of dissipating in the future. Rather, with the global businesses and brands adopting crypto, many enthusiasts are bringing back their faith in cryptocurrencies, as the ‘future of finance’.