It has become very easy to buy and sell cryptocurrencies on exchanges and online investing platforms, but spending it on day to day items can still be a bit of a challenge. Many retailers don’t accept cryptocurrencies, and up until recently there hasn’t been a simple way of getting them from a personal wallet to a retailer.
That is all changing now with the release of crypto credit cards. Several companies are now issuing cryptocurrency credit cards acceptable by retailers all over the world, and some of them come with great rewards and perks as well.
The trend has caught on quickly, with Visa reporting that consumers spent more than $1 billion on crypto-linked cards in the first half of 2021.
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What Are Crypto Credit Cards?
Cryptocurrency credit cards are similar to any other type of credit card, but they allow cardholders to spend different types of cryptocurrencies and sometimes earn cash back in crypto. The credit card usually connects to a dedicated crypto wallet, where cardholders can load funds to spend and pay off the card. The amount cardholders can spend depends on the value of the funds in their wallet or on a credit check. Like other credit cards, crypto cardholders will need to pay back what they spend and may have to pay interest if they don’t pay back within a certain amount of time.
One of the main differences between a regular credit card and a crypto credit card or a Bitcoin credit card is that when spending with a crypto card, cardholders aren’t actually sending crypto to the merchant or retailer they are buying from. Instead, the crypto they have available to spend automatically gets converted into fiat currency, which is sent to the merchant.
Sometimes the conversion happens at the time of sale, and with other cards it gets converted when added to the card or wallet. In other cases, the cardholder spends fiat currency and receives rewards in crypto.
How Do Crypto Credit Cards Compare to Traditional Credit Cards?
Like other credit cards, cryptocurrency credit cards may have daily spending and withdrawal limits or limits or minimums. They may also have a limit on how much a consumer can add to their connected wallet. Some companies have different levels of cards and rewards depending on how much a cardholder adds or stakes in their wallet. Certain cards require cardholders to stake a particular cryptocurrency coin in their wallet in order to get a card or rewards.
Visa or MasterCard support most of the crypto currency cards, allowing cardholders to withdraw at ATMs and spend anywhere those cards are accepted around the world.
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Benefits of Crypto Credit Cards
Crypto investors have multiple reasons for getting a crypto credit card, such as:
• Conveniently use their crypto holdings
• Withdraw cash at ATMs
• Simple cryptocurrency payments with online and in person merchants using Visa and MasterCard networks
• Instantly convert funds into different fiat currencies instead of paying high exchange rates and going through the hassle of converting from one fiat to another when traveling
• Earn rewards such as cash back on spending and access to airport lounges
• Many crypto cards offer low or no monthly, activation, or transaction fees
• Fast, efficient, and traceable transactions
Cash in on up to $300–and 3% cash back for 365 days.¹
Apply and get approved for the SoFi Credit Card. Then open a bank account with qualifying direct deposits. Some things are just better together.
Drawbacks of Crypto Credit Cards
Although there are many benefits to using crypto credit cards, there are downsides as well. Some card companies require cardholders to stake tokens that may not be widely used. They also contain fees that may be higher than other types of credit cards.
Another consideration for cardholders: The volatility of Bitcoin and other cryptocurrencies may make it difficult for cardholders to decide whether to spend funds or to keep track of the conversion rates.
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Crypto Credit Cards vs. Debit Cards
Currently there are more options for crypto debit cards than credit cards, but more crypto credit cards are becoming available. The difference is that crypto credit cards give cardholders access to a line of credit, whereas with debit cards the cardholder spends funds that are in their wallet, and no more. Debit cards require a balance, while some credit cards don’t even require cardholders to have a dedicated wallet attached to them.
Crypto debit cards may provide the cardholder with cash back when they use the card, but the cash back is usually in a crypto associated with the card issuer, not a popular crypto like bitcoin or ethereum.
Top Crypto Credit Cards to Choose From
There are several cryptocurrency credit cards to choose from, each with their own features and benefits. Some crypto cards allow you to spend crypto directly, while others allow you to spend fiat dollars and earn rewards in crypto. Some of the most popular options include:
Nexo Crypto Credit Card
Nexo offers a credit card with extraordinarily large lines of credit up to $2 million. To qualify for a card, an investor must verify their identity through a KYC (Know-Your-Customer) process and deposit crypto into their account wallet. The crypto gets converted when purchases are made.
More than 40 million retailers around the world accept the Nexo card. Cardholders get 2% cashback on all purchases, in either Bitcoin or the NEXO token. There are zero withdrawal or deposit fees to use the card.
Card accounts have high security, with 24/7 fraud monitoring and 256-bit encryption.
The current APY for the card is up to 8%.
BlockFi Credit Card
Cardholders can use this Visa card issued by Evolve Bank & Trust anywhere that accepts Visa, online and in person. They spend fiat currency but receive rewards in crypto. Cardholders get 1.5% cash back in Bitcoin with every purchase they make, which also earns interest in their account wallet, with the opportunity to earn another $750 in Bitcoin bonus rewards.
If cardholders spend $3,000 or more within the first three months they receive $250 in Bitcoin. There is a $200 annual fee for the card and it’s available to US residents in all states except for New York.
The Unifimoney Visa card gives cardholders cash back in gold, Bitcoin, or equity, which they can earn interest on in their account. There aren’t many other details available yet about this upcoming crypto credit card.
Crypto.com Visa Card
The Crypto.com Visa Card has five tiers of cards, requiring stakes of from $0 to $400,000, The rewards on the entry-level card start at 1%, but the highest-level, Obsidian card offers 8% in rewards. The cards come with other benefits as well, depending on their level, including reimbursement for Spotify and Netflix subscriptions and access to airport lounges.
The soon-to-launch (summer 2021) Gemini Mastercard has no annual fee and offers rewards in more than 30 cryptocurrencies available on the Gemini exchange without charging an exchange fee. The card does not allow you to spend crypto, but offers rewards in cryptocurrencies.
If you have been buying crypto and have a portfolio you are looking to start spending, crypto credit cards are a convenient way to spend while also earning rewards.
Photo credit: iStock/RgStudio
You will need to maintain a qualifying Direct Deposit every month with SoFi Checking and Savings in order to continue to receive this promotional cash back rate. Qualifying Direct Deposits are defined as deposits from enrolled member’s employer, payroll, or benefits provider via ACH deposit. Deposits that are not from an employer (such as check deposits; P2P transfers such as from PayPal or Venmo, etc.; merchant transactions such as from PayPal, Stripe, Square, etc.; and bank ACH transfers not from employers) do not qualify for this promotion. A maximum of 36,000 rewards points can be earned from this limited-time offer. After the promotional period ends or once you have earned the maximum points offered by this promotion, your cash back earning rate will revert back to 2%. 36,000 rewards points are worth $360 when redeemed into SoFi Checking and Savings, SoFi Money, SoFi Invest, Crypto, SoFi Personal Loan, SoFi Private Student Loan or Student Loan Refinance and are worth $180 when redeemed as a SoFi Credit Card statement credit.
Promotion Period: 4/5/2022-12/31/2022. SoFi reserves the right to exclude any Member from participating in the Program for any reason, including suspected fraud, misuse, or if suspicious activities are observed. SoFi also reserves the right to stop or make changes to the Program at any time.
Eligible Participants: All new members who apply and get approved for the SoFi Credit Card, open a SoFi Checking and Savings account, and set up Direct Deposit transactions ("Direct Deposit") into their SoFi Checking and Savings account during the promotion period are eligible. All existing SoFi Credit Card members who set up Direct Deposit into a SoFi Checking & Savings account during the promotion period are eligible. All existing SoFi members who have already enrolled in Direct Deposit into a SoFi Checking & Savings account prior to the promotion period, and who apply and get approved for a SoFi Credit Card during the promotion period are eligible. Existing SoFi members who already have the SoFi Credit Card and previously set up Direct Deposit through SoFi Money or SoFi Checking & Savings are not eligible for this promotion.
New SoFi Checking and Savings customers and existing Checking and Savings customers without direct deposit are eligible to earn a cash bonus when they set up direct deposits of at least $1,000 over a consecutive 30-day period. Cash bonus will be based on the total amount of direct deposit. Entry into the Program will be available 4/5/22 to 5/31/22. Full terms at sofi.com/banking. SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC.
SoFi members with direct deposit can earn up to 1.50% annual percentage yield (APY) interest on all account balances in their Checking and Savings accounts (including Vaults). Members without direct deposit will earn 0.90% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. Rate of 1.50% APY is current as of 06/28/2022. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
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Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.
1See Rewards Details at SoFi.com/card/rewards.
SoFi cardholders earn 2% unlimited cash back rewards when redeemed to save, invest, or pay down eligible SoFi debt. Cardholders earn 1% cash back rewards when redeemed for a statement credit.1