Significance of Crypto Credit Cards in 2021

Significance of Crypto Credit Cards in 2021
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Credit cards are considered to be a convenient way to make payments. Much like traditional credit cards, crypto credit cards reward their users but in cryptocurrencies. As the cryptocurrency markets rise, crypto has become a valuable asset in several investors' portfolios worldwide.

What is a crypto credit card?

A crypto credit card allows users to spend cryptocurrencies and win rewards in cryptocurrencies. Crypto debit cards are also available in the market. However, unlike crypto debit cards, a crypto credit card allows users to borrow from the card issuer and pay them back later. There is not much difference between traditional credit cards and crypto credit cards. The only significant difference between traditional credit cards and crypto credit cards is that users pay back in cryptocurrencies, and the rewards are received only in cryptocurrencies.

Types of crypto credit cards

Different crypto credit cards have different ways of rewarding.

BlockFi credit card:

BlockFi, credit card users, can earn up to 1.5% cashback rewards in more than ten cryptocurrencies like Ethereum, Bitcoin, etc. It gives 3.5% cashback crypto rewards within the first 90 days of card membership and 2% cashback in all the crypto purchases over $50,000 annually. After depositing the points on a good standing account, BlockFi converts the points into the user's desirable cryptocurrency.

SoFi credit cards:

SoFi credit cards permit their users to redeem reward points for either Ethereum or Bitcoin.

Venmo Credit card:

Venmo credit cards allow users to purchase Ethereum, Litecoin, or Bitcoin with the cashback earned from rewards.

Brex Business card:

 Users can spend their reward points on either Ethereum or Bitcoin through the Brex Business Card.

Gemini Credit Card:

This crypto credit card deposits cryptocurrencies directly into the user's Gemini account. For instance, a credit card Gemini will reward up to 3% in payback in Bitcoin. The reward is immediately deposited into the Gemini account of the customer without having to wait for the monthly statement to cut.

Watch your spending

The best part of using a crypto credit card is earning rewards that have a rising potential in the future. As cryptocurrency is considered a taxable asset, one might want to consult a tax professional for guidance before acquiring or selling crypto. Remember that delay or failure in paying back will cost late fees and high interest, similar to conventional credit cards. Annual fees are also applicable on crypto credit cards. These cards will also have some effect on the user's credit score.

Every crypto credit card has a diversified portfolio of cryptocurrencies through which users can earn rewards. If users are interested in investing in a particular coin, they'll have to ensure that the card and the exchange allow them to invest in the coin of their choice. Buyers should always check the terms and conditions of a crypto credit card to ensure they're eligible before applying for it. Users can claim most of the crypto rewards earned within the United States. If someone manages a cryptocurrency outside the United States, they might be violating international laws.