Credit cards are considered a convenient way to make payments and make purchases if used wisely. What about cryptocurrency credit cards? Like their conventional counterparts, the new kid on the block also rewards users, but in cryptocurrency. They are, however, a bit more complex.
What is a crypto credit card?
A crypto credit card allows the user to spend cryptocurrency, and it rewards in cryptocurrency. There are also debit cards in the crypto world. Unlike encrypted debit cards, an encrypted credit card allows you to borrow from the card issuer and repay later. Not much different from how traditional credit cards work. The big difference is that you are paying back in crypto as well. The rewards, if any, will also come in cryptocurrencies such as Bitcoin.
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.
BlockFi credit card users can earn 1.5% cashback in rewards in over 10 types of cryptocurrency, Bitcoin and Ethereum included.
In the case of SoFi credit cards, the reward points can be redeemed for Bitcoin or Ethereum. The Venmo credit card, on the other hand, allows users to purchase Bitcoin, Ethereum, Litecoin, or Bitcoin Cash with the cashback earned on purchases.
With Brex Business Card, users can spend reward points on Bitcoin or Ethereum.
Monitor your spending
A key point to keep in mind is that crypto cards look a lot like conventional credit cards, and failure or late repayment will result in high interest and late fees. These cards will also have some weight on your credit score. Annual fees are also applicable as for traditional credit cards.
Regardless of the rewards, crypto credit if not repaid on time can cost you dearly. Understanding the terms and conditions of crypto credit cards is crucial for your finances.