A cryptocurrency credit card is one that rewards you with cryptocurrencies for your purchases. It functions similarly to a cash back credit card in that it rewards you for your purchases at a predetermined percentage, such as 1.5%. The distinction is that bitcoin credit cards allow the cardholder to buy cryptocurrency using that money.
Here’s a basic example of how this would work with a crypto rewards credit card that earns 1.5% back on purchases:
- You spend $1,000 in purchases during a billing period.
- That spending would be worth $15 of rewards.
- The card issuer would use that to buy $15 of a cryptocurrency.
Most crypto credit cards let you choose from different cryptocurrencies, although certain cards only offer one cryptocurrency or a small number of them.
It’s worth noting that not all crypto credit cards only offer rewards in cryptocurrency. Some also give you other options, such as cash back. They’re still considered crypto credit cards as long as cryptocurrency is one of your reward options.
Best Crypto Credit Cards for 2023
Crypto credit cards are a type of credit card that allows users to spend their cryptocurrency holdings instead of traditional fiat currency. These cards can be useful for individuals who want to use their cryptocurrency assets for everyday purchases or who want to earn rewards for their cryptocurrency spending.
When choosing a crypto credit card, some factors to consider including:
- Fees: Look at the card’s fees, including annual fees, transaction fees, and foreign exchange fees. Some cryptocurrency credit cards may charge higher fees than traditional credit cards, so it’s important to compare different cards and choose one that fits your budget.
- Rewards program: Check the card’s rewards program, such as cashback or loyalty points, and determine if it aligns with your spending habits and preferences. Some cards may offer rewards in cryptocurrency, which can be appealing to cryptocurrency enthusiasts.
- Security features: Consider the card’s security features, such as two-factor authentication, fraud protection, and encryption. Make sure the card issuer has robust security measures in place to protect your cryptocurrency and personal information.
- Customer support: Look for a card issuer that provides reliable and responsive customer support, especially when it comes to issues related to cryptocurrency. You may want to check online reviews and ratings to see how other customers have experienced the card issuer’s customer support.
- Cryptocurrency support: Check which cryptocurrencies the card supports and ensure that the ones you want to use are included. Some cards may support a limited number of cryptocurrencies, while others may support a more extensive range.
- Card issuer reputation: Research the reputation of the card issuer and ensure they have a trustworthy track record. You may want to check their regulatory compliance and financial stability, as well as read reviews from other customers and industry experts.
- Risks: Finally, consider the risks associated with using a cryptocurrency credit card, such as volatility in cryptocurrency markets, potential fraud, and security risks. Be sure to understand these risks before making any financial decisions and using the card for transactions.
Here are three popular crypto credit cards that you may want to research and consider in 2023:
- BlockFi Rewards Visa Signature Card: This card offers up to 1.5% cashback in Bitcoin on all purchases. It also has no annual fee and no foreign transaction fees. The card supports several cryptocurrencies, including Bitcoin, Ethereum, Litecoin, and others.
- Crypto.com Visa Card: This card offers up to 8% cashback on purchases made with the card. It also offers a variety of other perks, such as airport lounge access, free Spotify and Netflix subscriptions, and more. The card supports several cryptocurrencies, including Bitcoin, Ethereum, and many others.
- Nexo Card: This card offers up to 2% cashback on all purchases made with the card. It also offers other benefits, such as no annual fees, no foreign transaction fees, and free withdrawals from ATMs. The card supports several cryptocurrencies, including Bitcoin, Ethereum, and many others.
How to choose the best crypto credit card
Shopping for any other form of credit card can be very different from selecting the finest crypto credit card. These are the elements to consider in order to choose the best one.
Crypto credit cards are typically given by websites that let you purchase and sell cryptocurrencies. Additionally, they are frequently exclusively accessible to users of that platform. For instance, in order to apply for the BlockFi Rewards Visa® Signature Credit Card, you must first have an account with BlockFi. With the majority of the greatest credit cards, you wouldn’t have to worry about this restriction.
Start by determining whether any bitcoin apps or exchanges where you currently have an account provide their own credit cards. Given that you are already a client, this is the most practical choice. Comparing all of your card possibilities is also a smart idea if you’re willing to register accounts with different sites.
Types of cryptocurrency available
You can earn a variety of coins on each cryptocurrency credit card. The quantity of options varies greatly, but the majority of cards give you at least a handful.
You can choose any cryptocurrency credit card if you’re open-minded regarding the cryptocurrency you receive. Nevertheless, if you’re interested in earning a particular cryptocurrency, look for a credit card that supports it.
Rate of reward
The amount a crypto credit card earns on purchases is known as the rewards rate. Some cryptocurrency cards offer a flat rate for all types of purchases. Some cards have rates that are lower on purchases made outside of bonus areas and higher in bonus categories.
The most crucial thing is to choose a cryptocurrency credit card with a high rewards rate. For the most part, flat-rate cards are useful for everyone, although bonus category cards might be more advantageous if you frequently spend a lot in a certain area.
These can make a big difference in which crypto credit card is the best value. Here are the most common types of fees to look for as you compare credit cards:
- Annual fee: A yearly fee charged for the card. The majority of crypto cards are no annual fee credit cards, so you can find plenty of options you can get for free. This is a big plus, because when your credit cards aren’t costing you money every year, you’re less likely to run into a situation where you have too many credit cards.
- Foreign transaction fee: A fee charged on transactions made in foreign currencies or that are processed through foreign banks. It’s good to have a credit card with no foreign transaction fee, and if you’re a frequent international traveler, it’s practically a must.
- Cryptocurrency sales fee: Some cards charge a fee when you sell your crypto rewards. While this doesn’t necessarily mean you need to rule out those cards, one without this type of fee could be a better deal.
How do crypto credit cards work?
On your cryptocurrency purchases, cryptocurrency credit cards offer benefits. With this kind of rewards card, you receive a percentage of your cash purchase back, such as 1.5%. After that, that sum is changed into a cryptocurrency. If you use a credit card that rewards you with 1.5% back in Bitcoin, $1,000 in purchases would get you $15 in Bitcoin.
Are crypto credit card rewards taxable?
If you sell cryptocurrency credit card rewards after they have appreciated in value, you will be taxed. Despite the fact that credit card rewards are typically tax-free, cryptocurrency rewards are unique since their value might change. When you obtain cryptocurrency incentives, you are exempt from paying taxes; but, you must do so if you sell them or use them in any other way after their value has increased in order to make a gain.
What credit score do I need for a crypto credit card?
Most crypto credit cards require a credit score of 670 or above to be eligible. Consumers with credit scores in the range of good to exceptional credit are typically the only ones eligible for these cards. Yet, even if your credit score is worse, you may still be eligible for some exceptions.