Credit cards

What to look for when buying crypto credit cards? Everything you need to know

For years, credit cards have been considered a convenient way to make payments. From cash payment to debit and credit cards, many businesses have now accepted cryptocurrency as a payment option.

Digital currency has now become a valuable asset in the portfolio of several investors 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?

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

The big difference is that you are also paying back in cryptocurrency and the rewards 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% cashback in Bitcoin. It is instantly deposited into the consumer’s Gemini account, NDTV reported.

Types of Crypto Credit Cards

BlockFi credit card: Users can earn 1.5% cashback in rewards in over 10 types of cryptocurrencies, including Bitcoin and Ethereum. The credit card gives 1.5% crypto rewards on all qualifying purchases. It gives back 3.5% in crypto rewards within the first 90 days of card membership and 2% back in crypto on all eligible purchases over $50,000 in annual spend.

Once the points have been deposited and the cardholder’s account is in good standing, BlockFi will allow you to convert the points into the cryptocurrency of your choice.

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

Venmo credit card: On the other hand, Venmo allows users to buy Bitcoin, Ethereum, Litecoin or Bitcoin Cash with the cashback earned on purchases.

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

Gemini credit card: This highly 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 be cut.

What to keep in mind when buying a crypto credit card

One of the best parts of a crypto card is the ability to earn rewards that have the potential to increase in value. If you earn crypto, it is considered a taxable asset 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 advice.

Each crypto card has a different wallet of cryptocurrencies in which you can earn rewards. If you want to invest in specific coins, make sure you know if the card and the exchange that supports it will allow you to invest in the coin you want.

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

Before applying for a crypto credit card, check the terms and conditions of the card to see if you live in an eligible state. If you manage your cryptocurrency account outside the United States, you may be breaking international laws, so the crypto rewards you earn are best managed in the United States.

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Posted: Sunday, December 19, 2021, 9:55 PM IST