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What are Crypto Cards: Easily Spend Crypto in Your Daily Life

2021-09-10 07:16:51

Cryptocurrencies are mainly used to invest, trade, or hold long-term (HODL). If users want to spend their crypto, they generally need to convert it into fiat currency and wait for the transaction to show up in their bank account. This is an inefficient way for people to spend their cryptocurrency in a free and smooth manner. However, with the adoption of debit and credit cards, crypto investors, traders, and holders have more options to spend and earn rewards. Although these types of products are gaining traction now, crypto rewards cards are not yet available in many countries. Nonetheless, crypto ATMs with blockchain support are rising. These are machines that allow users to convert cryptocurrency into their local currencies.crypto cards

What Is a Crypto Credit Card?

A crypto credit card enables a cardholder to pay merchants for goods and services with cryptocurrency. Some crypto credit cards also allow individuals to earn cryptocurrency rewards, similar to your typical credit card rewards like cash back. A crypto credit card is suitable for people interested in spending crypto in their daily lives or people who are deeply invested in crypto. Although the potential rewards for these cards may be enticing, it is crucial to first cover your financial priorities, such as saving up for emergencies or paying off debt. People with healthy financials will be able to more responsibly pay off crypto credit and will have the ability and capital to invest in crypto credit cards.

How Does a Crypto Credit Card Work?

With a crypto credit card, you can borrow crypto from the card issuer, which you have to pay back later. Crypto credit cards are similar to traditional credit cards, where the transfers are facilitated through payment processing networks like Visa or Mastercard. For example, if Mastercard is the party issuing your crypto card, it would mean your card is accepted at merchants that accept Mastercard payments. In some instances, crypto credit cards are eligible for card protection or benefits offered by Visa or Mastercard. In addition, card owners can earn rewards for payments made with cryptocurrency. Users can receive the rewards via a cashback or coins in other cryptocurrencies.

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What are the Pros and Cons of a Crypto Credit Card?

Advantages of a Crypto Credit Card

For the advantages, rewards from crypto credit cards may increase in value more and become more enticing than fiat cashbacks and rewards offered by traditional credit cards. When cryptocurrencies appreciate, crypto rewards that are not redeemed yet will also increase in value. In contrast, cashbacks and merchandise purchased with traditional credit cards rarely appreciate in value, and users typically cannot sell them for profit in the future. Thus, crypto credit card rewards can be regarded as passive investing where one can stash value. Users may even invest the crypto cashback into the cryptocurrency market. The cashbacks may even have more value in the long term because of the cryptocurrency market’s volatility.

Disadvantages of a Crypto Credit Card

For the disadvantages, the cryptocurrency market’s volatility may also cause the value of cashbacks to fall. For example, a 2% cashback can depreciate to a lower value depending on the market trend. In addition, some cards may lock card owners into a single or only a handful of currency available for crypto coin purchase. Depending on the crypto card issuing institution, one may get crypto rewards until the end of the credit card billing cycle. By that time, the value of cryptocurrency may have changed drastically, making the value of the reward earned and then received afterward ultimately different.

Daily purchases with a crypto credit card would give rewards that are typically in cryptocurrency. Card owners can sell these crypto rewards where they can convert the rewards into fiat for daily spending. However, tax returns can also be complicated if users sell the cryptocurrency they gained from the rewards. Remember that card owners are not taxed on the rewards granted but on the gains made from the appreciated cryptocurrency. Some exchanges may also charge an additional transaction fee for redeeming cryptocurrency. This fee effectively reduces rewards earned because fees are built into reward redemption.

What are Examples of Crypto Credit Cards?

Before applying for a card, it is essential to understand the rewards structure that fits your spending pattern. If you do not spend often, a flat rate structure is sufficient. Heavy spenders benefit from the tier-based system more. It is important to check if your desired currency is compatible with the card. Different card providers offer various transfer and conversion limits. Some cards have minimum stake requirements to access certain rewards. The account linking method also matters whether the fund is sourced from a prepaid account, digital wallet, or credit account.

Below are some examples of cards offered on the market:

crypto credit card benefits
Overview of crypto credit card benefits offered on the market (Source: FInder)


  • The BlockFi credit card offers cashback on purchases, and rewards are automatically redeemed monthly to BlockFi Interest Account where owners can earn additional interest. It has no annual fee and foreign transaction fees. The card also has benefit access to Visa’s Luxury Hotel Collection, rental car savings, and more.
  • The SoFi credit card has an excellent reward rate when redeemed into the SoFi account. It has no annual fee, foreign fee, no purchase category restriction, no annual rewards caps, and zero cash-out minimum. Rewards can be converted into cryptocurrency easily or be used for bills, spending, or cash withdrawals.

What is a Crypto Debit Card?

For crypto holders looking for convenience, crypto debit cards are created for quick payment where the amount is automatically deducted from their e-wallets rather than based on accrued debt. Crypto debit cards, though issued by a bank, are not backed by a crypto wallet. When owners use their debit cards for daily purchases, the crypto fund is converted into fiat currency. Similar to the crypto credit card, users can also earn rewards.

How do Crypto Debit Cards Work?

Crypto debit card owners need to have funds in their accounts to make payments. Card owners can make transactions with crypto debit cards in Bitcoin (BTC), Ethereum (ETH), and other altcoins. Crypto debit cards are also integrated with Visa and Mastercard. Owners can top up the debit card through a mobile app or the issuer’s website. Users can also withdraw funds in crypto debit cards through applications like Apple Pay or Google Pay. Cardholders can pay with desired digital currency, which is turned into the fiat currency that the shop accepts. Take note that crypto debit card payments may be subjected to local regulations. Therefore, it is vital to research the blockchain brands that you are applying for a debit card.

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What are the Pros and Cons of a Crypto Debit Card?

Advantages of a Crypto Debit Card

For the advantages, expenses are lower with crypto debit cards as financial institutions convert your crypto funds into local currency without additional payment when traveling abroad. Crypto debit card owners are less prone to theft as e-wallets provide higher security with unique passwords, biometric scans, and two-factor authentication. Owners can also disable the card over an app by reporting it stolen. Crypto debit cards are also well suited for smaller transactions such as daily transactions and monthly or yearly payments such as gym membership or annual subscription fees.

Disadvantages of a Crypto Debit Card

For the disadvantages, some rewards may be issued in a specific crypto, which can be less valuable than other major cryptos like Bitcoin (BTC) or Ethereum (ETH). Rewards can also be valued differently since the market is volatile. For example, a 6% cashback reward is less of an incentive when the coin is on a downward trend. From the high volatility, the card provider that charges fees in cryptocurrency rather than fiat may take part of the profit from the card owner.

Additionally, many prepaid debit cards in the market also require proof of stake. This means that card owners must stake some amount of a specific cryptocurrency in a particular blockchain to be eligible for card membership and access the best rewards. It might not be worth it if the rewards you earned in a specific crypto were on a downward market trend, which sometimes does not compensate for the costs invested in owning a debit card. With a debit card, one may also be prone to spend. In years to come, the value of cryptocurrency may double or triple due to volatility, which means you can lose a lot of value from regular expenses.

What are Examples of Crypto Debit Cards?

Similar to crypto credit cards, users need to note that different card providers offer various benefits and limitations. Thus, users need to do their own research before applying for a crypto debit card. The following are some examples of cards offered on the market:

crypto debit card benefits
Overview of crypto debit card benefits offered on the market (Source: The Balance)
  • The Bitpay Bitcoin debit card currently supports eight cryptocurrency assets. Users can load Bitcoin on the card and convert it into fiat currency for spending. Users can also use it for purchase in-store and online purchases. The card has an in-built chip for enhanced security. No credit checks are needed to apply for the card. It has no Bitcoin cashback or rewards and charges 3% for international fiat currency conversions.
  • The Coinbase debit card offers a wide selection of cryptocurrencies, a low account minimum, and a convenient user experience. Card owners can use the card at any location where VISA cards are accepted and linked to Google Play. Features like instant card fees, purchase history, and instant notification is available. However, the fee structure is expensive and difficult to understand. Cashback rewards are not paid automatically.
  • The VISA card allows users to buy, trade, sell and pay bills to earn cashback rewards on purchases up to 8%. Users can top up the card in crypto or fiat currency. It has no annual and monthly admin fees. At the moment, the card supports BTC and BNB only. It charges 2% for cash withdrawn at ATMs.


Crypto credit cards and crypto debit cards are similar to traditional cards but with more incentives and perks to promote mass cryptocurrency adoption. The main draw of crypto credit and debit cards is that regular usage offers card owners benefits such as crypto rewards and cashback. Nevertheless, the crypto cards have their own benefits and trade-offs, such as transaction fees, reward policies from different card issuers, and cryptocurrency volatility. The crypto rewards offered may counteract the money spent, while the cashback earned can be used to reinvest into cryptocurrency.

Nonetheless, users should build good financial habits through understanding spending patterns. Perhaps users should set a benchmark, so they do not overspend as cryptocurrencies are volatile and will suddenly appreciate and depreciate in value. Lastly, users should keep in mind that some cards are still in their early stages of development, so more research is needed to understand the fees, security, and rewards the card issuer provides. All in all, these cards can be a good investment if you utilize and reap the benefits offered by the financial institution or issuer.

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