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Are Crypto Rewards Credit Cards A Good Idea? – Forbes Advisor

Are Crypto Rewards Credit Cards A Good Idea?
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Crypto rewards credit cards are the latest incentive style payment option that aims to reward users with the ability to earn cryptocurrencies. These cards can be great for varying degrees of crypto enthusiasts – from the curious person who is finally ready to get involved in cryptocurrency but can’t take the risk to jump into the market, to those who delve into cryptocurrency – those who have the strength to believe in the continuity of digital currency movement and its potential for growth and profit.

Find the best credit cards of 2022

No single credit card is the best option for every family, every purchase, or every budget. We have selected the best credit cards in a way that is designed to be the most beneficial for the largest variety of readers.

Introduction and short history

Cryptocurrencies have not been around for a long time, but in a short period of time they have made a huge impact.

Electronic money first appeared in the late 1980s, but it wasn’t until 2009 that a decentralized cryptocurrency, known as Bitcoin, appeared on the market. Being the pioneer of the movement, Bitcoin was introduced by an anonymous individual or group of individuals, no one really knows, using the alias Satoshi Nakamora. When Bitcoin first entered the market, it was basically not valued at all. That’s right – it was essentially worthless when a fiat value was applied to it. By 2010, it was worth about $0.0008 USD. In February 2021, the value of Bitcoin exceeded $50,000 per coin.

With Bitcoin growing in popularity, a lot of other cryptocurrencies have popped up – estimated at over 4,000 as of early 2021. Users now have more choices than ever when it comes to cryptocurrencies.

Crypto Rewards Credit Cards

Crypto reward credit cards are the latest gadget to emerge in the cryptocurrency space and so far the bonus incentives look very tempting, and more so if cryptocurrencies continue to gain value at the rapid rate they are today. But what exactly are crypto rewards credit cards?

Although it looks confusing on the surface, crypto rewards credit cards are not really that different from most traditional rewards credit cards. Just like the majority of credit cards in circulation, transfers are facilitated through the largest payment processing networks in the world: Visa or Mastercard. So if your crypto rewards card is issued by Visa, your card will be accepted everywhere Visa credit cards are accepted.

Depending on their processing network, Crypto rewards cards can also be eligible with the benefits and card protection offered by Visa or Mastercard. You can use a crypto rewards card for purchases just like any other type of credit card. Every time you spend with your crypto rewards credit card, you will be eligible to earn rewards. While some credit cards offer airline miles or cashback, crypto credit cards reward you with Bitcion and other cryptocurrencies or in some cases, allow you to redeem your winnings in cryptocurrency.

What is a Crypto Debit Card

The rise in the popularity of cryptocurrency at the same time has created a need for cryptocurrency holders to quickly access their cash to spend. Until recently, the only options for cryptocurrency holders were to either invest and hold long term (HODL) or speculative trading. In order to exchange their cryptocurrency into fiat currency for daily spending, coin holders need to convert their coins into fiat currency and then wait for their funds to reach their bank account. This is a slow and inefficient way to get paid.

To meet this need, crypto debit cards are starting to appear on the market. Their release revolutionized the movement, helping to attract interest and, eventually, public adoption. Although we have all seen the growth of cryptocurrency, the inability to spend it in a real world environment has made it a kind of “monopoly” money for many.

Crypto rewards debit cards can be used at merchants just like using a standard debit card, but instead of being backed by a bank account, they are backed by your own crypto wallet. Think of it as a prepaid debit card rather than a traditional debit card.

First, the cryptocurrency is transferred to the user’s choice of fiat currency before being loaded onto the debit card. Once downloaded and ready to use, purchases are processed in that selected currency. However, rewards are given as a specific digital currency depending on the debit card.

Many of these crypto debit cards also earn rewards in the form of cryptocurrency for daily spends. Some cards can even offer very lucrative rewards, depending on how you rate the cryptocurrency.

Crypto debit cards, similar to crypto credit cards and other traditional payment options, work on major payment processing networks such as Visa and Mastercard. If your crypto rewards debit card was issued by Visa, the card will work anywhere Visa is accepted. You can even withdraw cash from ATMs around the world using encrypted debit cards.

Crypto Rewards Credit Cards vs. Crypto Rewards Debit Cards and Prepaid Debit Cards

Despite operating on major processing networks and being able to earn rewards in the form of cryptocurrency, crypto rewards credit cards are actually slightly different from the available prepaid debit options.

The main difference is that with crypto credit cards, card members make purchases with credit over the credit limit allowed by the issuing institution and are responsible for paying the balance. Crypto debit cards involve the user using his own money – if he doesn’t have the money, he won’t be able to use his card.

One of the weaknesses of prepaid crypto debit cards when compared to crypto rewards credit cards is that they generally earn rewards in a specific cryptocurrency from the bank, which is usually much less valuable than some of the more popular cryptocurrencies like Bitcoin and Ethereum.

Crypto.com Rewards . Visa Card*For example, it gets up to 8% back on all purchases but the truth isn’t exactly that exciting. That earns 8% back in rewards CRO, which is Crypto.com’s currency token, valued at just about $0.08. Buying $100 will earn you 8 CRO, but once converted to USD, it is actually closer to $6.40. However, the 6% cashback card on purchases is a great deal, but with the volatile cryptocurrency market, if the coin is trending lower, that percentage can drop significantly.

Another essential difference is the stake commitment proof of many prepaid debit cards. Proof of stake, in its simplest form, is when a cryptocurrency holder contributes some of their digital currency to a specific blockchain network in order to support said network. Some debit cards require proof of stake as a term for card membership.

These requirements can be very important and tying your money to the issuing financial institution may not be worth the opportunity cost. Bonuses may not compensate for the loss you incur as a result of limiting your capital.

Crypto Credit Cards Comparison

BlockFi Rewards® Visa Signature Card

The BlockFi Visa credit card provides potential applicants with an opportunity to see if they are likely to be approved for the card via a flexible credit check before they formally apply. This is somewhat unique among crypto card issuers.

The BlockFi Visa credit card comes with a welcome offer: 3.5% refund, up to $100 in crypto, for the first three months. The card has an annual fee of $0. All purchases receive a base rate of 1.5% in the cryptocurrency. You can redeem 2% of your cryptocurrency on every purchase over $50,000 in annual spend. Your annual spend is reset at the beginning of each memory year of the card.

Brix Cards

While they don’t exclusively earn cryptocurrency, Brex cards now include Bitcoin (BTC) and Ethereum (ETH) redemptions along with other options including miles, gift cards, cash or travel, making it the first business card to include crypto As a redemption option.

Brex offers two different business cards, each targeting a different type of business. Single copy, Brex card payable monthly It allows well-funded companies to access capital quickly, while the daily paid Brex Card requires no minimum balance and allows the company to charge up to 80% of its limit. On both cards, earnings can be redeemed for Bitcoin or Ethereum in the same way as for miles, gift cards, cash or travel.

Gemini Credit Card™**

A Gemini credit card, like BlockFi Visa, has the ability to earn rewards in the form of Bitcoin and other cryptocurrencies. Cardholders use US dollars to make purchases but can earn rewards in cryptocurrency.

The details of the new Gemini card are a bit vague, but we know that it will earn you up to 3% on purchases. It will also provide zero exchange fees on crypto rewards and will be available in all 50 states in the US

Scheduled for a release sometime in 2021, you can now jump in the queue to get the Gemini card.

Crypto.com Visa Card**

The Crypto.com Rewards Visa Card is a prepaid debit card that includes 5 different “flavors”, each with its own unique set of perks and benefits. These tier levels are determined by the amount of your “stake,” or essentially a loan, the crypto card issuing institution. The lower level requires no bets, but the rewards are minimal. The top level requires 5,000,000 CRO, which is the digital token of Crypto.com, a staking requirement. 5,000,000 CRO Bonuses are equivalent to $400,000 USD, making the top tier out of reach for everyone except for a very limited group of Crypto investors.

The mid-tier Crypto.com Rewards Visa cards seem to make the most sense because the caching requirements are less egregious, yet the benefits are still attractive. Free perks include Amazon Prime, monthly Spotify subscriptions, Netflix, airport lounge access, and more.

SoFi credit card

If you have an active SoFi investment account, then SoFi credit card It allows you to redeem your points for cryptocurrency. You’ll earn 2% cashback on all eligible purchases and can redeem it directly in one of the 20 different types of crypto offered through SoFi Invest.

Tomo Credit Card*

With the Tomo Card, customers who have collected at least $10 in rewards can choose to redeem their winnings for any of the three major cryptocurrencies: Bitcoin, Ethereum and Litecoin, with more options available in the future, said Kristi Kim, CEO and founder of TomoCredit at Interview with Forbes Advisor. You can redeem your earnings 28 days after the previous month’s statement has been paid in full.

Bitcoin Reward Card Upgrade*

Bitcoin Reward Upgrade Card* Earn Unlimited 1.5% of Bitcoin on Purchases. You can hold bitcoin as an investment or sell it at any time and redeem the value for a statement credit. Your bitcoin will be held by NYDIG, a financial technology and services company focused solely on bitcoin. When you choose to sell your Bitcoin, you will be subject to a 1.5% transaction fee. So, $10 worth of bitcoin would result in a sale proceeds of $9.85 to apply as a statement balance. The first time you earn Bitcoin with the card, it will be subject to a 90-day holding period before you can sell it.

It allows you to select the option “Cryptocurrency cashback”. This will allow you to use your regular cash back from your Venmo account to purchase the cryptocurrency of your choice. You can keep this crypto or buy or sell more cryptocurrency when you want. As of this writing, you can buy Bitcoin, Ethereum, Litecoin, or Bitcoin Cash. While Venmo won’t charge a transaction transaction fee when you buy cryptocurrency this way, it will charge a fee any other time you buy or sell your property.

bottom line

No doubt cryptocurrencies are here to stay, but are they the way of the future? How you feel about this question can well decide if a cryptocurrency rewards credit card is right for you. More established crypto enthusiasts may find that crypto rewards credit cards as a great addition to their wallet and provide assistance in growing these digital assets. However, given the relatively low risk of crypto rewards credit cards, it may appeal to those who wish to finally take their first steps into the crypto world.

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