Cryptocurrency credit cards are emerging from different startups. Here’s what you need to know about how they work and how different they are from bank credit cards.
The emergence of credit cards completely transformed the shopping experience, primarily when used judiciously to make payments. Different startups and now propping cryptocurrency credit cards; using crypto credit cards promises to be a rewarding experience, but it’s good to understand them first.
The $2 trillion cryptocurrency market quickly catches up and disrupts the traditional fiat currency market. Today, startups are introducing valuable services that make cryptocurrencies attractive to new users. The introduction of crypto credit cards that offer rewards in cryptocurrency instead of the traditional cashbacks or travel rewards is the new kid on the block.
What are cryptocurrency credit cards?
Cryptocurrency credit cards are credit cards that enable users to spend digital assets besides earning rewards. The cards work just like the regular bank credit cards, only that you spend cryptocurrency just like you would your regular fiat currency.
However, unlike cryptocurrency debit cards, crypto credit cards allow users to borrow from the issuer’s account so they can repay later. In this case, you pay back in crypto, and whenever there are rewards, they are also offered in crypto.
How do they work?
A crypto credit card works just like your regular card; users can earn rewards when they swipe their cards and make purchases. The secret weapon for potential users is to compare the different available cards so you can pick the right one depending on your lifestyle.
How does the reward system work?
The different available crypto credit cards offer users various kinds of rewards. For example, the Gemini credit card offers rewards of up to 3% in payback in BTC, which is instantly deposited into a user’s Gemini account. The BlockFi credit card, on the other hand, offers 1.5% cashback that’s paid in up to 10 different cryptocurrencies, including Bitcoin and Ethereum.
Other cards in the crypto credit card market include SoFi that offers rewards in Bitcoin and Ethereum and Venmo that allows users to redeem their purchases and receive rewards in Bitcoin, Ethereum, Litecoin, or Bitcoin Cash.
Top Crypto Credit Cards
Three of the leading crypto credit cards include the following:
The BlockFi card that began offering rewards after it was launched in late 2020 offers amazing rewards compared to those that provide a flat cashback reward.
Additionally, users enjoy the benefits of the Visa Signature Card travel and purchase protections, rental car savings, and access to Visa’s Luxury Hotel Collection.
The Gemini Credit card was slated to launch at the end of 2021, but the exchange is still building a waitlist. The card differs from the BlockFi card by offering tiered savings.
The Gemini Credit card will be offered in partnership with the leading payment processor MasterCard, leaving room for additional benefits.
Launched in 2020, the SoFi Credit Card started as a flat cashback card that offered users the option of redeeming rewards into their eligible SoFi accounts; these included personal or student loans, SoFi invest Accounts, and SoFi Money cash accounts.
The SoFi Credit Card is offered in partnership with World Mastercard, inviting the likeliness of additional benefits.
Should you get a Crypto Credit Card?
Like other credit cards that offer cashback rewards, it’s only prudent to acquire a crypto credit card if it is in sync with your spending habits. If you love the idea of cryptocurrencies and the freedom they offer, then, by all means, find out how you can get one.
Nonetheless, you want to carefully weigh what each of the cards offers against the involved costs. The most important thing to remember, though, is that you must be prompt in repaying what you’ve spent. Like the conventional bank credit card, any delays in repayment will attract interest and late fees. What’s more, crypto credit cards could also easily weigh in on your credit score as well.
No matter what crypto credit card you choose, you want to remember that you are obliged to pay back in time, or else the convenience they offer will burden you. Always read carefully to understand the terms and conditions of crypto credit cards before joining the bandwagon.
Tom is a freelance writer with over 10-years’ experience in content creation, blog writing, and SEO specializing in the blockchain and cryptocurrency niche. As a philosophical figurehead, he believes that to make our world a better place, we must invest in incorruptible products and procedures, of which Bitcoin and other cryptocurrencies are leading examples.