What is a crypto card?
Learn what is a crypto card and why these cards are becoming popular payment options. Find out the advantages of using a crypto card vs traditional credit cards, and how they can help you save money.
Read on and find out what they are, how they work, and how to pick the best one for you!
If you live on planet Earth, you probably heard about cryptocurrencies. But do you know what a crypto card is?
We have long been hearing about how cryptocurrencies are going to take over in this new age of metaverses and borderless transactions.
Even governments have been joining the party with their CBDCs (Central Bank Digital Currencies).
However, private enterprise seems particularly interested in how different digital tokens offer growing opportunities for everyday transactions.
After all, as much as CBDCs are very well dressed in polished official guise, non-government digital currencies such as Bitcoin or Ethereum have their own special appeal to users.
Whether it is for the privacy they offer, their apparent tax advantages for lack of regulation, or whatever it is, the truth is that people are increasingly more willing to invest in and use digital tokens.
While not that many places accept crypto, credit card companies have come up with ways to appeal to crypto investors.
Their credit cards offer cryptocurrency rewards on purchases, loyalty perks and even cash rewards, like a regular credit card.
Card issuers also offer debit cards. They convert your crypto into fiat currency (regular money) and then load the cash into your debit card.
As you can see, financial institutions are willing to get into this market while it is still in its lair.
Read on, and we will explain to you in detail what crypto cards are. Learn how they work, how to choose yours, and how to apply for it.
Defining what a crypto credit card is
Generally speaking, these cards reward your spending with crypto. It allows you to spend traditional fiat while earning crypto rewards.
One of the greatest advantages is that they are extremely flexible in their rewards system.
Most rewards credit cards will offer you cash back or points. You can redeem for travel or discounts at the issuers’ retail partners.
Crypto credit cards allow you to choose exactly which cryptocurrency you would like to receive for your rewards earnings.
Not only that. They often offer astounding 10% cash-back returns in cryptocurrency. That is an unparalleled reward among rewards credit cards, which offer 2% cash-back at most.
To sum it up, crypto credit cards work pretty much like any traditional credit card. Albeit with the flexibility and earning power that you would expect from crypto.
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How do crypto credit cards work?
You can use it like you would any other card. You can swipe them in stores or use them online when purchasing goods or services.
Transactions occur in fiat currency and, just like any regular credit card, you will receive a monthly statement with your credit card activities for that period.
Until the time of writing this article, no crypto credit card allows users to pay for their bills directly from their crypto wallet.
However, this is not a future impossibility, as some issuers have already signaled they are taking steps to make that happen.
When you hear about cash-back crypto cards, you can expect a similar system to that of regular cash-back cards.
And just like any regular cash-back card, you will have to opt for one way or another of getting access to your cash back.
You can get your cash back in all the traditional ways you find in regular credit cards. By that we mean you can redeem it for a statement credit or a cash deposit.
However, there may be differences in the total percentage you get as cash back depending on how you choose to redeem it.
Also, some cards work with purchase categories which earn more than others, and usually the highest earnings are restricted to crypto cash back.
So, when you shop for a crypto credit card, make sure it rewards you in a way that satisfies your expectations.
If you are a crypto investor, it can make a lot of sense to get a card that rewards you 10% on specific categories.
However, if having immediate access to the money is more important to you, there may be other credit cards that offer you greater advantages.
How do crypto debit cards work?
Crypto debit cards are a lot more simple. They are not connected to a checking account. Rather they are connected directly to a crypto wallet or an exchange account.
You can pre-load it with crypto and each purchase will draw against your balance, or you can opt to have the card get the crypto from your wallet and automatically convert it into fiat.
What is the right crypto card for you?
As you might be aware, there are no one-size-fits-all solutions when it comes to financial decisions.
You have to evaluate what your priorities are and decide whether a crypto credit card or a crypto debit card, or both work well for you.
If you are a penny hoarder who likes to take advantage of every dime you can earn on your spending, then a cash-back crypto rewards program will be perfect for you.
If, on the other hand, you do not particularly enjoy the idea of paying for stuff on credit and would rather just have the money drawn from your crypto funds, then a crypto debit card fits you best.
When considering a crypto credit card, take into account whether your credit score is ready for another credit card.
Also, make sure the issuer is widely trusted in the crypto space as well as in the broader finance sector.
Check for fees and make sure you keep them at a minimum. Also, check which crypto currencies the card works with, for some cards may not accept your crypto of choice.
Another important factor is whether there is and what is the transaction size limit.
Crypto investors sometimes are used to moving large sums of money, which may not be possible in some crypto cards.
The bottom line
Crypto cards are a new and exciting way of putting your crypto into action, and we are just seeing the dawn of a new era in finance.
Get your foot in the door and take advantages of the early stages of this revolution.
And if you’re still not investing in crypto, read the following content to find the best regulated crypto broker and start your investing career in cryptocurrencies.
About the author / Danilo Pereira
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