What to look for when you purchase crypto credit cards? All you need to know

FPJ Web Desk Updated: Sunday, December 19, 2021, 09:59 PM IST

Just like any credit card that offers travel rewards or cashback on purchases, a crypto credit card offers rewards in cryptocurrency./ Representative Image | Image: Pixabay

Since years, credit cards are regarded as a convenient way to make payments. From paying cash to debit and credit cards, many companies have now accepted cryptocurrency as a payment option.

The digital currency has now become a valuable asset in several investors portfolio around the world. According to a report by CoinMarketCap, the cryptocurrency market has now reached a valuation of over $2 trillion.

What is a crypto credit card?

Just like any credit card that offers travel rewards or cash back on purchases, a crypto credit card offers rewards in cryptocurrency. There are debit cards too in the crypto world. However, unlike crypto debit cards, a crypto credit card allows you to borrow from the card issuer and payback later, very similar to traditional credit card functions.

The big difference is that you also pay back in cryptocurrency and the rewards that you receive will also come in cryptocurrencies such as Bitcoin and others.

How does the crypto credit card work?

Different crypto credit cards reward users differently. A Gemini credit card rewards up to 3 per cent in payback in Bitcoin. It is instantly deposited into the Gemini account of the consumer, NDTV reported.

Types of crypto credit cards

BlockFi credit card: Users can earn 1.5 per cent cashback in rewards in more than 10 types of cryptocurrencies, Bitcoin and Ethereum included. The credit card gives 1.5 per cent reward in crypto on all eligible purchases. It gives 3.5 per cent back in crypto rewards during in the first 90 days of card membership and 2 per cent back in crypto on all eligible purchases over $50,000 of annual spend.

Once the points are deposited and the cardholder account is in good standing, BlockFi will let you convert the points into the cryptocurrency of your choice.

SoFi credit cards: Offers rewards differently from BlockFi credit cards. In the case of SoFi credit cards, rewards points can be redeemed for either Bitcoin or Ethereum, CNBC reported.

Venmo Credit card: On the other hand, Venmo allows users to purchase Bitcoin, Ethereum, Litecoin, or Bitcoin Cash with the cashback earned from purchases.

Brex Business card: Meanwhile, Brex customers can spend reward points on either Bitcoin or Ethereum.

Gemini Credit Card: This very crypto credit card deposits cryptocurrency directly into your Gemini account every time you swipe your card and gives you instant access to your rewards, rather than having to wait for the monthly statement to cut.

What to keep in mind when you buy a crypto credit card

One of the best parts of a crypto card is the ability to earn rewards that have the potential to rise in value. If you earn crypto, it’s considered an asset which is taxable if you decide to sell it. So if you plan to earn or sell a substantial amount of cryptocurrency, you may want to consult a tax professional for guidance.

Each crypto card has a different portfolio of cryptocurrencies you’re able to earn rewards in. If you want to invest in specific coins, be sure to find out if the card, and the exchange that supports it, will allow you to invest in the coin you want.

Many crypto cards are bare-boned when it comes to benefits, so if you’re an avid traveler, you may find more value in a travel rewards credit card. Or if you are trying to save money each month on your purchases, a cash back credit card may serve your needs more effectively, CNBC reported.

Before applying for a crypto credit card, one needs to check card’s terms and conditions to see if you live in an eligible state. If you’re managing your cryptocurrency account outside of the United States, you may be violating international laws, so the crypto rewards you earn are best handled within the U.S.

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Published on: Sunday, December 19, 2021, 09:55 PM IST