What is a cryptocurrency credit card?
While traditional debit cards are usually tied to a classic bank account, a cryptocurrency debit card allows the user to access bitcoin and other cryptocurrencies, exchanges, and crypto wallets. With crypto debit cards, crypto holders have the ability to spend it wherever Visa or Mastercard is accepted, and now there are even crypto credit card options that allow you to take out a loan against your crypto holdings!
Let's take a closer look at the cryptocurrency card ecosystem to see if the combination of the classical financial system and digital money of the future can be a convenient solution for you personally in 2022. We are highly recommended to use kraken trading bot to increase your income and save your time.
Why do I need a cryptocurrency bank card?
There are many reasons why you should get a crypto debit card. For most people, crypto debit cards will do nothing but make it easier to turn crypto assets into cash that can be spent in the real world. But for some people, the reality is that a prepaid cryptocurrency card is just about the only viable option for accessing the global economy.
Yes, you can still keep your crypto assets on the exchange, sell crypto and transfer fiat to your bank account when you need money to spend, but this is always a laborious process that does not make sense in the era of digital money. Crypto debit cards give you the ability to turn your crypto assets into local currency in minutes and you can use that cash at a mall that accepts Visa or MasterCard right away. You can even withdraw physical cash from any ATM with these cards.
While converting crypto to fiat is the primary use case for crypto debit cards, there are other benefits to look out for, such as:
- the ability to instantly get a loan secured by your crypto assets,
- receiving cashback from using the card in bitcoin or other cryptocurrency.
What is the difference between credit and debit crypto cards?
Before we go any further, it's important to understand the difference between credit and debit cards:
- A debit card is a card from a financial institution, such as Visa or Mastercard, that allows users to make card-to-card payments and deposit and withdraw money from a bank account.
- With a credit card, the owner does not have to deposit their funds to a bank or other financial institution in order to start spending money. The user can spend a predetermined amount each month and is expected to return the money they have spent to the card at the end of the month.
While crypto debit cards have been around for years, crypto credit cards are a relatively new phenomenon that allows users to instantly spend money they have borrowed against their crypto-denominated collateral. There are also a number of cryptocurrency cashback cards that work in the same way as traditional cashback credit cards, with the key difference being that cashback rewards are paid out in bitcoin.
What to look for when choosing a bitcoin card?
Simplicity
The best crypto credit card should be easy to use. After all, the whole point of combining cryptocurrency with the traditional financial system is to start using bitcoin and other crypto assets for everyday payments as soon as possible. Some crypto debit cards have rewards and fee rebate bonus programs that are very confusing, and their terms are not only difficult to understand but difficult to follow. For most people, finding a card that simply lets you convert bitcoin to a Visa prepaid spend card is all it takes.
Security
Not surprisingly, security is an extremely important issue for everything related to the world of cryptocurrencies. Crypto assets work differently than the traditional payment rails that most people have used in the past. Most importantly, transactions made in bitcoin and other cryptocurrencies are generally irreversible. This means there is no one you can turn to for help if you have sent money to the wrong wallet address, lost your password, or been hacked. For this reason, it is imperative that you choose the best cryptocurrency card that allows you to safely store and use your cryptocurrency.
Reliability
Reliability is another key issue in the world of cryptocurrencies. The reputation and visibility of a brand can be extremely important to ensure the safety of funds. When choosing the best crypto card, you need to make sure that you are working with a reliable company so that you do not end up in a situation where you cannot access your money at all.
Commissions
While the cost of fees shouldn't be the only factor you'll consider when choosing between different offers, it's no secret that everyone wants to spend as little money as possible on data processing and ATM withdrawals. There is a wide variety of fee options used by different crypto card providers, so be sure to check the terms and services before deciding which card to issue. If you find it difficult to find information about the fees associated with a particular card, then this card provider may be trying to hide the real cost of paying for their services.
Peculiarities
The additional features that are included with most crypto cards are still very limited as most crypto card providers are busy promoting the basic feature of converting crypto to fiat before moving on to other features. However, most card options have at least one distinguishing feature that makes them stand out from the rest of the players on the market. When looking at various offerings from cryptocurrency card providers, think about your personal situation and see if there are any cards that are better suited to your specific needs. For example, some cards offer interest on balances, while others reward referrals to friends.
Applications
Having an app associated with a crypto credit or debit card is often found with the best card providers. All users want to be able to track their balance, transactions, and every other aspect of their crypto-currency card at any moment, which means that having such an application should be mandatory. One of the most useful features available in crypto card apps these days is the ability to instantly freeze your card in case it is lost or stolen.
Cashback
It should be noted that the level of incentives and rewards that are offered for crypto cards is currently quite limited. There are some top bitcoin cards out there that offer 5% cashback or more, but these offers usually come with a requirement to buy and hold some of your own utility token (this carries some risk). More and more programs that allow you to receive bitcoin cashback continue to go online, but now it may make sense to think more deeply about other factors.
Availability
Accessibility is a big issue in the world of crypto credit cards because the rules around cryptocurrencies themselves seem to change every week. Not only do laws change, but companies like Visa and Mastercard will also change their own internal policies from time to time regarding how their partners can deal with crypto assets. Finding a card available worldwide is quite difficult right now, so make sure your bitcoin card is actually available in your country before making any commitment.
Convert between cryptocurrencies and local currencies
There are a number of different factors to consider when it comes to how you will be able to use your crypto card with your chosen cryptocurrency. What cryptocurrencies are supported by the crypto debit card? Are there bank fees that will be charged when topping up a prepaid card with cryptocurrency? How quickly are funds available after deposit? These are the questions you should be asking yourself when it comes to moving between crypto and fiat with a debit card.
Ways to replenish bank crypto cards
While popular crypto cards are focused on making the cryptocurrency deposit process easy and affordable, the reality is that these cards often have many different deposit methods that can be used. Yes, for the most part, you will be converting your bitcoin, ether, or other crypto of your choice into your local currency on a Visa or Mastercard debit card, but other options, such as direct deposit and bank transfers, will not hurt.
