Cryptocurrency is getting major hype all around the world. It is becoming an extremely important asset to trade in the financial market. It has been estimated that around $2trillion cryptocurrencies are present in the world and the numbers are just increasing with the passage of time. Crypto is becoming a part of our daily lifestyle. As from buying a cup of tea to winning profit in trading, the credit cards and debit cards are providing a great assistance.
To earn money, to carry out the transactions or to utilize the funds for daily chores, credit cards and debit cards are helping the people in many ways. One just has to open an account with the company, deposit the required amount and get their credit card or debit card without paying any initial charges.
Here’s a detailed guide that would help the readers about the use and functions of both the credit cards and debit cards.
What is a Crypto Credit Card?
A crypto credit card is actually a reward credit card that helps the users earn rewards when they purchase anything. It does not offer any cash points or cashback rather provide the opportunity to earn rewards to the users. These crypto credit cards are the same as the normal credit cards. One has to pay at the end of the billing cycle when he buys things via the card given by the bank.
The difference lies only in the type of rewards earned via the crypto credit cards. The rewards that one earns through the credit cards are then stored in his BlockFi account. The crypto credit cards are usually integrated with any brand. Therefore, they are normally cobranded.
Working of a Crypto Credit Card
As mentioned before, they work similar to the traditional credit cards. But one should be aware of the fact that each crypto currency card functions differently from the other and offers different rewards than the other.
For example, the BlockFi Reward Visa Signature Credit Card pays back a certain percentage to its customers on their yearly spendings. As one can own a number of cryptocurrencies, this credit card rewards the customers with reward points. When the reward points are accumulated and reach a certain limit, then BlockFi allows the holder to get them converted into crypto asset of their own choice.
As they are same as normal credit cards, one should be aware that one may have to pay the late fee or interest in case the balance is not credited each month. Moreover, one may be charged the yearly transaction fee, or the annual fee associated to the card as normal credit cards.
Factors to Be Considered with a Crypto Credit Card
There are a little more complexities associated with the crypto credit card than a normal credit card. Here are some factors that one needs to consider while working with a crypto credit card.
Each crypto credit card allows the trade of different cryptocurrencies. Having different profiles and uses, not all currencies could be traded using the same card. One should look upon the fact before trading that if the required coins he wants to trade are eligible for the credit card he is using. Otherwise, one has to buy the one that allows the transaction of his required coins.
The crypto credit card allows the users to earn the rewards. These rewards increase in value with the passage of time, this is the greatest benefit of using a crypto credit card. On the other hand, the cash back may lose value with the increase in the inflation, or the travel rewards also lose value in case of devaluation. But these both rewards are not taxed by the higher authorities.
However, if intends to sell the crypto rewards they are taxed as they are considered as an asset by the authorities. Therefore, before purchasing or selling any crypto asst, one should consult a crypto professional to avoid oneself from any kind of scam or fraud.
There are certain limitations attached to the usage of crypto credit cards. Not everyone can get the access to every type of crypto credit card due to laws drafted by the different states. Therefore, before purchasing a crypto credit card, one should go through the different rules and regulations given by the higher authorities of that region to avoid any mishappening in the future.
In addition to that, using the crypto credit card outside the United States is considered as illegal, therefore, to earn the rewards, one should utilize the credit card within the territory of the US.
different rewards are linked to different types of credit cards. For a regular traveler, the travel reward credit card proves to be fruitful. Similarly, for a cash back credit card is useful for the customers who intend to save money on every purchase made by each month.
Advantages Of Using a Crypto Credit Card
The major pros of using crypto credit cards are mentioned below.
- Offers Rewards
This is considered to one of the major pros of using the crypto credit cards, that it offers rewards in cryptocurrency unlike the other credit cards that usually offer cash backs or extra miles or travel rewards. Other credit cards offer rewards on daily items such as dine out, groceries or other such things.
However, the crypto credit cards such as Upgrade Bitcoin Reward Card provides 1.5% return on bitcoin.
- Access to Crypto Market
The crypto credit card could be used as way to enter into the crypto financial market. It creates further opportunities for the customers in trading and banking. The ones having the crypto credit card may not have to pay some of the exchange charges as fee.
Disadvantages of Using Crypto Credit Cards
The major cons associated with the crypto credit cards are as under.
- High Taxes
As mentioned before too, the crypto rewards being as assets are considered as taxable. When one sells a crypto reward that has increased in value, he has to pay the tax on the amount that has increased from when he actually bought the crypto to the time in which he is selling it. The gain earned in that period of time is taxable. This means crypto rewards are taxed when they are cashed.
However, the other rewards of such as cash back or travel reward son other credit cards are not taxed normally.
- Potential Value Loss
Crypto assets being highly volatile is the major drawback of buying a cryptocurrency. One may buy a currency thinking for the value to hike in the near future. But at the same time, no one can guarantee it. the value may fall at any time and may lead to severe losses sometimes.
Some Popular Crypto Credit Cards
Some of the most commonly used credit cards are as follows.
- Gemini Credit Card
This is the commonly used credit card that allows the users to earn rewards for almost more than cryptocurrencies. It charges no annual fee from the customers.
- BlockFi Rewards Visa Signature Card
This credit card charges no annual fee from the users and also offers 1.5% reward to the customers for every purchase they make. It also does no charge any foreign transaction fees.
This credit card uses other digital assets as collateral. This makes it eligible to deduct funds from the available credit line of the customers.
- SoFi Credit Card
This credit card provides the customers 2% cash back on every purchase. Though the card currently supports the trade in Ethereum and Bitcoin only, it is working to expand the range to facilitate the customers. the company demands no annual fee or any transaction fee from the users.
What is the Future of Crypto Credit Cards?
Crypto credit cards are getting a hype worth appreciating in the recent months. It has been considered as a positive way of integrating the cryptocurrencies in the daily life of the public. The owners need to work on making the crypto credit cards more accessible and feasible to use for the normal public so that they can also carry out their everyday tasks using the cards without the needs to convert them in the daily life currency.
What are Crypto Debit Cards?
By using the crypto debit cards, the users can make the retail purchases utilizing the available cryptocurrencies. Crypto debit cards are same as the traditional debit cards. They are integrated with the larger partnership exchanges such as Visa. In retail, the cryptocurrencies can be adopted by the masses and huge audiences by using the debit cards.
Working of a Crypto Debit Card
The crypto debit cards are used in the same way as normal debit cards. The difference lies, where the transaction is settled between the two payment partners working with the crypto exchange instead of the normal banks. The payment can be made easily in case one owns the required funds for the transaction in the crypto wallet. Here, the crypto wallet or the exchange account will be debited instead of the bank account in traditional banking.
Advantages of Using Crypto Debit Cards
Following are the major advantages of using crypto debit cards.
Crypto credit cards are considered as a convenient way to use the cryptocurrency in daily life. They are used to convert the coins into cash that could be used for daily chores. Daily ATM withdrawals or depositing money in the bank account could also be done by using crypto debit cards.
- Ability to Earn Rewards
Earning rewards in return is the major advantage of using the crypto debit card. For winning the rewards, one has to stake or hold a cryptocurrency. One should also take notice of the fact that there must not be any additional charges attached that may outweigh the rewards earned.
Disadvantages of Crypto Debit Cards
- Expensive Integration with Other Companies
One has to transfer the cryptocurrency into the wallet whose debit card he is using. The currency cannot be directly used from another wallet. The transferring process is expensive and charges high fees.
There are different kinds of charges associated with different kinds of debit cards. The inactivity fee, transaction fees, physical card fee or many more. For example, Coinbase charges a transaction fee of about 2.49% while carrying out the transaction through a debit card that contains any cryptocurrency other than USDC.
- High Taxation
The regular debit cards or credit are not taxed normally. But this rule is not applicable while considering the crypto debit cards. One may have to pay high taxation charges over the cryptocurrency traded via the crypto debit cards.
Who Offers Crypto Debit Cards
As in advancement made in cryptocurrencies, the debit cards are also offered by a number of companies such as Binance, Coinbase, Nuri, Crypto.com, Monolith or BlockFi. All these exchanges have been integrated with the payment providers such as Swipe, Mastercard and Visa. In the recent days, PayPal has also joined the crypto debit card club and it will also be offering a number of facilities and offers to its customers shortly.
Some Popular Crypto Debit Cards
Crypto debit cards are offered by the Visa and Mastercard in integration with the well-known exchanges. These debit cards may include:
- BitPay Debit Card
This is an instant Mastercard that does not convert the balance and reloads it immediately.
- CoinBase Debit Card
On every purchase, this Visa debit card allows the users to earn crypto rewards.
- Crypto.com Visa Card
This debit card allows the customers to transfer the funds via bank transfer or some other cryptocurrency or debit or credit cards. For a period of time, it allows the users to stake the crypto tokens that could then help them in qualifying their card.
- Binance Visa Card
It provides the users cashback rewards that depends on the BNB average balance of the user every month.
- Swipe Visa Card
This debit card offers the users a cash back on every purchase that may range between 1 to 5%. This card supports the transactions in about seven cryptocurrencies. It has also integrated with a number of companies that allow you to pay for the daily life chores too.
What is the future of Crypto Debit Cards?
The crypto debit cards do not follow the decentralized rules and regulations imposed for the usage of cryptocurrencies normally. But at the same time, this approach is highly appreciated and adapted by the masses. The users are getting used to operating the crypto debit cards that are ran by a large number of retail chains and operating stores. This approach has also proved to be a major step in converting the attention of the public towards crypto assets.
Cryptocurrency Debit Cards vs Cryptocurrency Credit Cards
The crypto credit cards and debit cards provide the facility to the customers by converting the cryptocurrency into cash for carrying out the payments for daily goods and items. Normally the traditional cards have to move the money to utilize the funds, that may take many hours or days sometimes as these cards use centralized exchanges to carry out these conversions. However, the debit cards do not require any movement of money to be used.
The crypto credit cards are similar to the traditional cards where the user has to fill an application and check the credit in the account before normally starting the trade through the card. Moreover, it also allows the users to win awards on every purchase done.
The usage of the crypto credit and debit cards is getting a continuous hype all over the world. These cards provide the same functions as the traditional credit and debit cards. They help the customers in withdrawal of the currency immediately from their accounts.
Is It Worth It to Buy the Crypto Credit Cards and Crypto Debit Cards?
The crypto credit and debit cards have taken the world by storm in the past recent years. The popular platforms are offering the use of digital currency worldwide making it easier for the customers. Mastercard is offering the users to utilize the digital currencies in more than 90 million locations all over the world.
Similarly, Visa has also integrated its platform with more than 50 crypto platforms to provide the card services to its customers worldwide.
These crypto credit cards and debit cards are offering services worldwide and are largely accepted. There are a few factors that one must consider before dealing with the crypto credit cards and debit cards. These may include market volatility, taxations, crypto exchanges and local laws and jurisdictions imposed on using them in the given geographical region.
The ultimate decision to own a crypto credit card or debit card is made after looking upon if one can afford it financially or not. It also depends upon the spending habits and needs of a person. One should look upon the rewards offered, the restrictions imposed, and the limits given on the spending of the currency by the owners. Moreover, the platforms integrated with the cards and the cryptocurrency they allow to trade also plays a major role in the decision.
Tokenhell.com produces top quality content exposure for cryptocurrency and blockchain companies and startups. We have provided brand exposure for thousands of companies to date and you can be one of them too! All of our clients appreciate our value / pricing ratio. Contact us if you have any questions: email@example.com. Cryptocurrencies and Digital tokens are highly volatile, conduct your own research before making any investment decisions. Some of the posts on this website are guest posts or paid posts that are not written by our authors (namely Crypto Cable , Sponsored Articles and Press Release content) and the views expressed in these types of posts do not reflect the views of this website. Tokenhell is not responsible for the content, accuracy, quality, advertising, products or any other content posted on the site. Read full terms and conditions / disclaimer.