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Cryptocurrency — sometimes referred to as blockchain technology — is a hybrid between a currency and an investment. There are many different types of cryptocurrencies, with Bitcoin being the most well-known. As the popularity of cryptocurrency continues to increase, banks and other issuers are coming out with crypto credit cards and crypto debit cards.

While these two types of cards both allow cardholders to earn cryptocurrency, there are some key differences between a crypto credit card vs. crypto debit card. It’s important to understand how they differ so you can make the right choice for your financial situation.

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What Is a Crypto Credit Card?

The term crypto credit card usually refers to a type of credit card that allows cardholders to earn cryptocurrency as a reward. Cryptocurrencies are often more volatile than other types of rewards you can earn, so make sure you’re prepared for that level of volatility before signing up for a crypto credit card.

Just like with any other credit card, crypto credit cards draw from a line of credit. Cardholders must pay back their balance in full each month in order to avoid incurring interest charges. Purchases and payments on crypto credit cards are usually made with U.S. dollars, though some cards may allow cardholders to use cryptocurrency held in an associated account.

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How Crypto Credit Cards Work

Crypto credit cards earn rewards in a very similar way to most other rewards credit cards. With each purchase you make using the card, you’ll earn cryptocurrency.

As an example, say your crypto credit card earns 3% back at restaurants. If you make a $100 restaurant purchase, your crypto wallet will get credited with $3 of cryptocurrency.

Pros and Cons of Using a Crypto Credit Card

Especially given the volatility of cryptocurrency, there are a number of upsides and downsides to take into consideration before using a crypto credit card:

What Is a Crypto Debit Card?

A crypto debit card is a type of debit card that withdraws crypto directly from your wallet to make purchases. However, when you make a purchase, the merchant gets paid in fiat currency, which means a conversion must take place from your type of cryptocurrency into U.S. dollars.

Many crypto debit cards also allow you to access your cryptocurrency wallet at merchants or ATMs that don’t normally accept cryptocurrency. This can give you added flexibility and access to your cryptocurrency funds.

Additionally, some crypto debit cards also can earn cryptocurrency as rewards.

How Crypto Debit Cards Work

Like a regular debit card, most crypto debit cards operate on one of the major card networks (Visa, Mastercard, etc). This allows you to use your crypto debit card anywhere that these networks are accepted. While more and more merchants are starting to accept various forms of cryptocurrency, using a crypto debit card can give you better access to your cryptocurrency wallet.

However, note that when you pay with a crypto debit card, you’re selling some of your cryptocurrency and exchanging it for dollars. Because you may be selling at a higher or lower price than what you bought it for, this constitutes a taxable event. You’ll need to do the work of keeping track for tax purposes. Additionally, you could incur a fee for the conversion.

Recommended: Can You Buy Crypto With a Credit Card

Pros and Cons of Using a Crypto Debit Card

As you can see, there are pros and cons to this type of card. Here’s what to keep in mind when choosing crypto debit cards:

Recommended: Tips for Using a Credit Card Responsibly

Differences Between a Crypto Credit Card and a Crypto Debit Card

There are a few important differences between a credit card and debit card, and it’s important to know these differences when considering a crypto debit card vs. crypto credit card. Specifically, here are the essential differences to keep in mind:

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The Takeaway

Crypto credit cards and crypto debit cards both rely on cryptocurrency, but in different ways. A crypto debit card withdraws crypto directly from your wallet to make purchases. Purchases on a crypto credit card use a credit line issued to you in your local currency, but you may earn crypto rewards with every purchase.

If you’re looking for a non-crypto rewards credit card, you might consider a cash-back rewards credit card like the SoFi Credit Card. You can earn unlimited cash-back rewards, which you can use to invest in fractional shares, redeem for statement credit, or other financial goals you might have, like paying down eligible SoFi debt. Learn more and start earning credit card rewards today.

Apply for a SoFi Credit Card!

FAQ

Is it safe to use a crypto credit card or crypto debit card?

There are many different crypto credit cards and crypto debit cards. Look for one that is issued and branded by a reputable company. Even if you have a reputable card, know that there is still some risk, as anyone who gets your card number might also be able to access the cryptocurrency funds in your e-wallet.

Will buying crypto with a credit card amount to a cash advance?

If you want to buy crypto with a credit card, be aware that many credit card issuers will not allow you to buy directly with your card. And for those credit card issuers that do allow you to buy crypto with a credit card, the purchase may be treated as a cash advance. Cash advance transactions come with additional fees and often carry higher interest rates, so make sure you’re aware of those specifics before buying crypto with a credit card.

How are crypto credit and debit cards taxed?

Generally speaking, any time you use cryptocurrency to pay for something, you’re triggering a taxable event. This would likely include purchases made with a crypto debit card. The IRS has currently not given specific guidance on the taxability of crypto earned as a reward for purchases. Consult with your tax advisor if you’re not sure about how your crypto credit and debit cards will be taxed.

Photo credit: iStock/PeopleImages
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

SoFi Credit Cards are issued by SoFi Bank, N.A. pursuant to license by Mastercard® International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

¹See Rewards Details at SoFi.com/card/rewards.


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

¹Members earn 2 rewards points for every dollar spent on purchases. No rewards points will be earned with respect to reversed transactions, returned purchases, or other similar transactions. When you elect to redeem rewards points toward active SoFi accounts, including but not limited to, your SoFi Checking or Savings account, SoFi Money® account, SoFi Active Invest account, SoFi Automated Invest account, SoFi Credit Card account, or SoFi Personal, Private Student, Student Loan Refinance, or toward SoFi Travel purchases, your rewards points will redeem at a rate of 1 cent per every point. For more details, please visit www.sofi.com/card/rewards?cardtype=c. Brokerage and Active investing products offered through SoFi Securities LLC, Member FINRA/SIPC. SoFi Securities LLC is an affiliate of SoFi Bank, N.A.

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Money for college doesn’t grow on trees. Or does it? Every year, billions of dollars wait to be plucked from the branches by college students seeking merit-based aid.

The National Merit Scholarship Program alone plans to award more than $28 million in spring 2022. Merit aid is awarded to students based on factors outside of just financial need. These awards generally factor in a student’s skill or ability for a certain specialty.

Brainiacs merit recognition, but a student can earn merit aid based on talent in athletics and other interests, including puppetry and vegetarianism, as well as lineage.

So what’s the catch?

Patience, diligence, and timing come into play. This guide can help students who are starting the search for merit-based aid.

What Is Merit Aid?

College aid can generally be broken down into two categories:

Need-based. Eligibility for need-based aid is based solely on the ability to pay for college. Students can look for state, possibly school, and federal aid by filling out the Free Application for Federal Student Aid, commonly known as the FAFSA®, sharing information about income and assets.

Merit-based. Merit-based aid takes factors beyond financial need into account. According to the Department of Education, merit-based “means that something is based on a student’s skill or ability.”

Students can qualify for merit-based aid, often referred to as merit-based scholarships, with a variety of factors.

Scholarship money does not have to be paid back — it’s a gift. Merit aid can be a one-time payment, or it could be renewable year after year, depending on eligibility and terms of the aid.

Depending on a student’s financial needs, merit aid could cover part or all of their education costs. It might be just one component of a larger financial aid package.

Merit aid can be awarded for both undergraduate and graduate programs, and could be anything from a couple of hundred dollars for books and supplies to thousands of dollars to help cover tuition.

Recommended: FAFSA Guide

Strategies to Find Colleges that Offer Merit Aid

Not all schools offer merit aid. However, at schools where merit aid is offered, on average 22% of the student body received a merit award from the university, according to U.S. News & World Report. Here are a few tips on finding colleges that offer merit aid.

First things first, when you are creating your list of colleges you’re going to apply to — find out which of those offer merit aid. Knowing up front what options may be available to you is helpful and can be important as you prepare to pay for college.

Then, review the typical financial aid offer at your target schools. Some schools publish information on the percentage of students that receive merit aid and the average merit aid amount. Consider contacting the financial aid office if you have specific questions.

Another strategy to potentially improve your chance of merit aid — apply to schools where you are likely to get in. Since merit aid can be awarded on factors such as GPA, standardized test scores, or curriculum, being in the upper echelon of applicants could help put you at the front of the pack for earning merit aid.

In some situations, scholarship money may go unclaimed. Check out this guide to unclaimed scholarships for more information.

Which Schools Offer the Most Merit Aid?

Here’s what students can expect when it comes to merit aid from schools:

•   Generally speaking, private colleges award more merit aid than public institutions.

•   Ivy league schools don’t grant merit aid. No Ivy League institutions offer merit aid to their students. Other competitive universities, such as MIT, Stanford, and Caltech, don’t offer merit aid either.

•   Some higher-cost colleges may offer more merit aid than others. The cost of attending some schools can send a student into shock. However, some costlier schools will offer more merit-based scholarships. Oberlin College, for example, recently offered 42% of its student body merit-based aid, about $17,000 on average, to offset tuition and fees that have reached nearly $57,000.

•   Out-of-state students might be awarded more merit aid than in-state students at a public college or university. Because of the higher cost of attendance for out-of-state students, public schools may offer them merit aid to be more competitive.

•   Honors programs may offer more merit aid. State school honors programs can sometimes come with tuition discounts, or academic scholarships for students who get into the prestigious programs.

Keeping these trends in mind could help students think more strategically about where they’ll attend college based on the chances of being awarded merit aid from the schools.

How to Apply for Merit Aid

While merit scholarships are often referred to as “free money” when it comes to funding education, there is some work involved. Each scholarship will likely have its own requirements and application process, which might include personal essays, recommendations, and interviews. It’s important to read through each application carefully so it’s filled out without error.

Merit-based aid does not hinge on the financial need of the student or family, so should you submit the FAFSA first? Some colleges require students to fill out the FAFSA in order to be considered for school-based scholarships, including those awarded based on academic merit.

Plus, filling out the FAFSA could help you qualify for other types of financial aid, such as need-based Pell Grants or Direct Unsubsidized Loans. A quick aside to note that federal loans offer benefits and protections not necessarily afforded to private student loans. Since the FAFSA is free to fill out, it’s generally worth taking the time to see what other types of aid you qualify for. If financial aid and merit awards aren’t enough, private student loans could help.

Recommended: Private Student Loan Guide

Generally, you won’t need to fill out the FAFSA as a prerequisite for applying for a private merit scholarship.

If you’re not sure about the requirements at your school, it can be worthwhile to call the college admissions office to see if a financial aid application is required to apply for any merit scholarships at that school.

When evaluating merit scholarships from other private sources, keep in mind that each one may have different application requirements and deadlines. Some deadlines may be as early as a year before college starts.

Finding Merit Aid Awards for College

Colleges and universities award merit aid, but there are many other ways to find scholarships, including private organizations and state-level scholarship search tools and directories.

You can learn about private merit scholarships by using search engines like CollegeBoard.org, Fastweb.com, and Scholarships.com. In addition, it can be helpful to talk to your school guidance counselor and the leaders of any organizations you participate in to suss out merit scholarships.

Consider exploring a few of the following avenues when seeking merit aid opportunities:

•   Local groups. Local clubs or foundations offer scholarships. Community chapters of the Lions Club or Rotary Club offer aid for students seeking higher education. Because there’s a smaller pool of applicants, local merit scholarships may even be less competitive.

•   Cultural organizations. Students from minority backgrounds have an opportunity for specific merit aid. Students of Native American descent, those who identify as LGBTQ, and women might qualify for scholarships.

•   Foundations and nonprofits. The Bill & Melinda Gates Foundation offers full scholarships for those who qualify. Local nonprofits or educational foundations might offer small awards to students as well.

•   Businesses. National companies, such as Google , offer generous merit aid.

•   Niche interests and programs. Students who have an interest or hobby can search for merit aid surrounding it. Everything from greeting card creators to puppetry enthusiasts and promoters of vegetarianism have a chance to capitalize on their passions.

Once a student is granted merit aid, the funding might be directly credited to the school to pay for tuition, room, board, or other costs. Or the aid might come directly to the recipient via check. The size of the awards will vary, but seeking out aid in unexpected places can help drive down the cost of education.

Some Cautions About Merit Aid

Merit aid can be incredibly helpful for students paying for college. But, it’s important to understand the full picture of the merit aid awards you receive. Understand the terms of the aid award, and any ongoing eligibility requirements outlined by the scholarship or grant.

For example, is the award for one year? Or is it an annual award over your college education? If it is a merit award to cover each year of college, are there ongoing eligibility requirements such as maintaining a minimum GPA?

Understanding how and when the merit aid awards you earned are paid out can be important to help you avoid financial surprises, like suddenly losing your merit scholarship, down the road. College students will be facing a lot of financial-firsts on their journey. Take a look at SoFi’s Ca$h Course: A Student’s Guide to Money with even more tips and strategies on managing your finances through college.

The Takeaway

A pot brimming with billions of dollars in college merit aid sits waiting every year. Stellar students and athletes come to mind as popular recipients, but merit scholarships are awarded based on other talents, too. To apply, deadlines and details require attention.

Merit aid might just be a piece of the puzzle, depending on the size and terms of the scholarship. Once federal and merit aid options have been exhausted, an undergraduate private student loan may help bridge any gaps.

Private student loans from SoFi offer competitive interest rates for qualifying borrowers, and have no fees, and flexible repayment plans. With an all-online application, SoFi private student loans come with membership benefits and resources.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Bank, N.A. and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Along with flights, lodging costs are one of the biggest expenses for many vacationers. As such, savvy travelers are likely on the lookout for how to save money on hotels when planning their vacation.

While hotel prices often rise and fall over time based on supply and demand, there are ways to save money on hotels on vacation. This ranges from being flexible about when and where you travel to getting a hotel credit card and taking advantage of cashback rewards. Read on for a full rundown of the best ways to save on hotels for your next vacation.

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Tips to Save on Hotels While Traveling

Wondering how to save on hotels when traveling? Here are some tips to try.

Getting a Hotel Credit Card

Using credit card rewards to travel for less is one way to save money on hotels while traveling. Most major hotel chains have a co-branded credit card that allows you to earn points for staying with them as well as on your everyday spending.

Additionally, many of these hotel credit cards offer sign-up bonuses. With these bonuses, you may be able to earn enough credit card points for a few free nights just by meeting a minimum spending amount.

There are different credit card rewards programs, so just make sure to choose the one for the hotel where you’re wanting to stay.

Earning Hotel Cashback

One of the downsides of getting a hotel credit card is that in most cases, you’re limited to using your points to stay with that particular hotel chain. If you have a Marriott credit card that earns Marriott Bonvoy hotel points, for instance, you can’t use them to stay at a Hilton or Hyatt.

One way to get around that is to use a credit card that offers cash back rewards. These cards allow you to redeem cash rewards from your everyday purchases that you can then use to pay for any hotel you want.

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Keeping an Eye Out for Deals

Flexibility is key to saving money on hotels, and the earlier you start planning your vacation, the more luck you’ll have in finding travel deals. Many successful vacationers start planning their trips up to a year before they actually plan to travel. That gives you plenty of time to explore your options, wait for deals to pop up, and keep an eye out for sales.

Checking All the Conditions While Booking the Hotel

When you’re booking a hotel room, you’re generally presented with several different room rates. You might have a different rate if you’re a member of the hotel loyalty program, if you prepay for your stay, or if you belong to a specific organization.

These different rates also usually come with different cancellation policies. Make sure to read the fine print before you book, so you can know what to expect during your stay. The fine print could also detail additional fees that the rate doesn’t clearly include.

Looking Out for Free Breakfast

One way to plan a budget family vacation is to look for hotels that include complimentary breakfast with the room rate. If you’re traveling with a family, getting the breakfast that’s included in your hotel reservation might save you anywhere from $20-$50 per day. This can free up some of your hotel funds for other vacation activities, and can make a difference when comparing rates from different hotels.

Joining a Hotel Points Program

Even if you don’t sign up for a hotel chain’s co-branded credit card, you’ll want to make sure to join their loyalty program. There’s typically no cost to join the hotel’s loyalty program, and you’ll generally get perks like lower nightly rates or complimentary Wi-Fi. This can be a great way to save money for a trip.

Taking Advantage of Falling Rates

One strategy for saving money on hotels is to only book a refundable rate that you can cancel at any time. Then, periodically check back to see if the rate has fallen. If the rate is lower than when you first booked the hotel, cancel your original reservation and book at the new lower rate.

There are also services that you can take advantage of if you don’t want to stay on top of price tracking yourself. For example, websites and apps like Hopper and Rebookey can monitor hotel prices and notify you if the price drops after you’ve booked.

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Making Payments in Advance

Alternatively, you can prepare financially for travel by making your hotel payments in advance. Many hotels offer a lower rate when you prepay as compared to a refundable hotel rate where your credit card isn’t charged until your stay. You could save anywhere from $10 to $20 per night by prepaying in advance.

Plus, if you pay with a credit card that offers credit card travel insurance, you’ll have peace of mind that your prepaid funds aren’t lost if your travel plans change unexpectedly.

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Sticking to Your Budget

Like most financial purchases, one of the best ways to save money is to establish a written budget and then stick to it. If you plan for a trip a year in advance, you can make a budget for your trip and then create a travel fund where you put 1/12 of the cost into your travel fund each month.

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Being Spontaneous

While hotel prices go up and down — sometimes multiple times per day — based on supply and demand, you can sometimes get great deals by booking at the very last minute. If you have a ton of flexibility, you can sometimes find cheap cruises or outstanding last-minute weekend hotel deals. This strategy is best used if you don’t have concrete plans and don’t have a strong preference for where you go.

Using Discounts You Already Have

If you’re a frugal traveler, you’ll want to also take advantage of any discounts that you already have. This could include saving on gas using grocery fuel points, buying discounted gift cards, or using credit card points to offset some of your travel costs.

This is another reason why planning in advance and being flexible can help — the more time you have to plan, the more time for you to take advantage of some of these deals.

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Apply for a New Rewards Credit Card With SoFi

Lodging costs can be one of the most expensive parts of any vacation, so it’s a good idea to know how to save money on hotel rooms. Hotel prices fluctuate often based on supply and demand, so plan as far in advance as your schedule allows. The more flexible you can be in terms of when you travel, where you go, and what hotel you want to stay at, the more likely it is that you’ll be able to save money on hotels.

FAQ

What days are the cheapest to stay in hotels?

Determining which days are the cheapest to stay in hotels depends quite a bit on where the hotel is and who their clientele typically is. If you’re looking to stay in a tourist-heavy vacation spot, it’s likely that weekends are most expensive. On the other hand, a hotel that caters to business travelers might be more expensive during the week and cheaper on weekends.

What time of the year do hotel prices drop?

There isn’t a set time of day or year when hotel prices drop. Instead, hotel prices vary according to supply and demand. One strategy to save money on hotels is to book a refundable rate initially. Then, you can monitor prices and if the price goes down, you can just rebook.

Are hotels cheaper last minute?

Hotel prices vary all the time, both up and down. It’s possible for hotel prices to go down if you wait until late in the day on the night you want to stay. This can be an option if you have flexibility in your plans.

Photo credit: iStock/aquaArts studio

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SoFi Credit Cards are issued by SoFi Bank, N.A. pursuant to license by Mastercard® International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

¹See Rewards Details at SoFi.com/card/rewards.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

New and existing Checking and Savings members who have not previously enrolled in direct deposit with SoFi are eligible to earn a cash bonus when they set up direct deposits of at least $1,000 over a consecutive 25-day period. Cash bonus will be based on the total amount of direct deposit. The Program will be available through 12/31/23. 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 3.80% annual percentage yield (APY) interest on Savings account balances (including Vaults) and up to 0.50% APY on Checking account balances. There is no minimum direct deposit amount required to qualify for these rates. Members without direct deposit will earn 1.00% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. These rates are current as of 3/17/2023. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet

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