Crypto Credit Cards

How do crypto credit cards work?

Crypto credit cards are similar to traditional rewards credit cards — you swipe your card for purchases and you earn rewards. But the rewards you earn, in this case, come in the form of an eligible cryptocurrency.

Crypto credit cards have a few other details that separate them from traditional cashback or rewards cards.

• Cards require a crypto investment account or a crypto wallet. The platform you use will differ by crypto card.
• You may be able to choose your desired cryptocurrency. For crypto credit cards that earn multiple types of cryptocurrency, you may need to select your desired currency through your account prior to making purchases.
• You may have to wait for rewards to post. While most crypto credit cards capture the market crypto value at the time of purchase, you may have to wait for those rewards to post to your account.
• Reward value can change over time. While a crypto card captures and delivers a specific amount or percentage of crypto to your investment account, its value is subject to the whims of the market from there — a big departure from traditional reward credit cards, which tend to offer a fixed rewards rate per point.

4 essentials when you compare crypto credit cards

Since crypto credit cards are so new and there are only a few on the market, the best way to compare them is going to come down to a few factors.

• Supported cryptocurrencies. Some crypto credit cards can only support a few types of cryptocurrencies, while others can earn over 60. Whether a card supports your cryptocurrency of choice will play the largest role in your choice in today’s market.
• Earning rates and earning categories. The higher the earning rate on an eligible purchase, the better. Some crypto credit cards are also offering category rewards, which can prove potentially lucrative if you often spend in those categories.
• Additional features. Most crypto credit cards to hit the market are fairly light on extra features compared to the cashback or travel cards you’ll find on the market. If a crypto card does offer extra features related to crypto, that’s a rarity and worth giving a closer look.
• Rates and fees. Finally, a crypto card’s rates and fees are important to consider. Since you aren’t guaranteed to “wipe out” these fees with guaranteed value like you can with cashback and rewards cards, extraneous fees can sting more than usual on a crypto credit card.

Are crypto credit cards worth it?

Crypto credit cards are best used by those already invested in cryptocurrency and comfortable with all of the risks that entails. If that’s you, a crypto credit card can help you add to your portfolio and diversify with minimal effort.

Get a crypto credit card if:

• You’re already invested in cryptocurrency and want more ways to diversify your holdings.
• You want a way of earning cryptocurrency without purchasing it directly or mining it.
• You’re interested in investing your credit card rewards rather than redeeming them for cash back or on travel.

Don’t get a crypto credit card if:

• You’re risk-averse or not willing to lose value on your earnings.
• You want a credit card with a variety of extra perks and features.
• You plan on spending your rewards as soon as you earn them.
• You want a card that makes it easy to manage your rewards.

Ask the experts

Should you choose a crypto rewards credit card over a general rewards credit card?

We reached out to a financial expert to get his thoughts and insight on whether consumers should make the jump to crypto credit cards.

• Morshed Alam
• Founder and editor at Savvy Programmer

There are a few reasons why now might be a good time to get a crypto credit card. First, with the recent surge in the value of cryptocurrencies, more and more businesses are starting to accept them as payment. So if you have some crypto assets that you want to use to make purchases, a crypto credit card can be a convenient way to do that.

Second, as more people start using cryptocurrencies, the infrastructure for using them will continue to improve. For example, there are now online services that allow you to pay for things with bitcoin and other cryptocurrencies even if the merchant doesn’t directly accept them as payment. This makes it easier for people to use their cryptos for everyday transactions.

Some people may find that using a crypto credit card is more advantageous than using a general rewards credit card, since the rewards offered by crypto credit cards tend to be geared specifically towards cryptocurrencies.

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• Bram Jansen
• Chief Editor of vpnAlert

As an expert, I’d assert some of the world’s largest credit card issuers are attempting to make spending and earning bitcoin simpler than ever before. You’re registering a taxable event every time you swipe one of these crypto cards. Many consumers are unaware that using cryptocurrency to purchase a cup of coffee or any other consumer item triggers a capital gains event. There is always a disparity between the cost basis, or how much you paid for the bitcoin, and the market value at the moment you spend it. In addition to the other taxes you must pay, such as sales tax, this difference may trigger income capital gains taxes. When you use one of these cards to make a purchase, you may get up to 4% back in a cryptocurrency of your choice. Those crypto incentives have a higher chance of appreciating than prizes denominated in fiat currencies like the US dollar.

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• Zachary Greene
• Crypto Expert Greenery Financial

Crypto credit cards’ popularity will be tied to cryptocurrency’s popularity for the foreseeable future, and thus their real popularity will be determined by cryptocurrency’s popularity. Personally, I think cryptocurrency markets will hit an all-time high, and with it, more people will come into the space and become interested in using crypto cards to make purchases due to the great rewards they offer.

There’s one caveat to that, though — I believe people will flock to these cards more and more if inflation is not kept under control, as they allow you to hold reserves of cryptocurrency rather than reserves of fiat currencies like dollars or pounds, making them particularly compelling the more people become concerned about inflation.

In my opinion, the next trend for these crypto cards is for them to move into properly being credit cards. Right now, most of them are more like debit cards, as you often need cash in your account to pay them off, while I believe in the coming few years, they’ll properly turn into credit cards, allowing you to pay from traditional bank accounts, as well as pay them directly with crypto-balances, as well as giving you higher credit limits depending on how much cryptocurrency you have invested with the card issuer.

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• Stefan Ateljevic
• Cryptopreneur and Founder of bitcoinplay.net

I think VISA cards that are crypto-friendly, such as the ones offered by Coinbase and Binance, are the future. Countries all over the world are starting to adopt crypto, governments have declared Bitcoin legal tender and even your average mom-and-pop shop now accepts crypto too!

The great thing about a card linked to crypto from VISA is that you don’t have to worry about transferring Bitcoin between wallets since it’s converted instantly to the currency of the country you are visiting. It’s even possible to take out cash at the ATM, deposit crypto at an ATM, and so on. Not to mention, it adds another option for travelers that have accumulated crypto over the years and are happy to use it.

The only downside is that when the markets are down, it’s not a good idea to bring your Binance card along since you will actually end up using money. During a bull run though, a cryptocurrency-enabled credit card is one of the best ways to liquidate your crypto for profit while traveling the world!

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• Levi Borba
• CEO of The Expatriate Consultancy

I do think that crypto cards will rise in popularity, and this is a trend that we are observing among our customers (expatriates and digital nomads).

The main reasons for that are:

They reduce (significantly) the transaction costs and fees imposed by modern banks. Years ago, we saw digital nomads (remote workers that live abroad while working remotely) losing between 2% to 5% of their income in banking fees and currency exchange. With crypto cards, these costs are often far below 1%.

They eliminate the government risk of some FIAT currencies. For example, we saw expatriates living in Brazil who, in the proximity of the elections (always marked by drastic currency fluctuations), lost much of their purchasing power due to the local currency devaluation. With crypto cards (and crypto paychecks), this electoral risk is eliminated.

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Crypto credit card fees

Unless stated otherwise, you can expect many of the same fees on a crypto credit card that you would find on a traditional credit card. On top of these fees, crypto credit cards may also feature additional fees to watch out for depending on what you’re doing with your earned cryptocurrency. Most of these fees have more to do with the handling of crypto itself rather than the crypto credit card.

• Capital gains tax events. A major difference between traditional credit card rewards and crypto credit card rewards is the possibility of a capital gains taxable event. In short, if you “cash out” on the crypto earnings you made through crypto card spending, you may have to pay taxes on any value gain, similar to taxes placed on stocks. This is in stark contrast to credit card rewards which are treated as discounts and not taxed as a result. You can check out a full list of taxable events at our full crypto tax guide.
• Deposit fees. Some crypto platforms charge a percentage fee when you deposit funds into your account. Though it’s unlikely your crypto rewards earned through card spending will incur this fee, any funds added to your account that don’t stem from your credit card may incur a fee.
• Trading fees. Whenever you buy or sell a cryptocurrency through a crypto exchange, your transaction is typically subject to trading fees. If you’re just using your crypto credit card to earn crypto for your crypto wallet, you won’t have to worry about buying fees. But should you ever sell the crypto you’ve accrued with your card, you should prepare to pay a fee on that sale.
• Withdrawal fees. If your crypto credit card earns crypto to an associated exchange and you want to move that money to your own personal secure crypto wallet, you may need to pay a withdrawal fee.

For more on potential crypto credit card fees, check out our crypto exchange fee guide.

The future of crypto credit cards

Should cryptocurrency continue to become more mainstream, card providers will likely grow and improve their crypto offerings. Regardless of how the market pans out, you can count on Finder to stay on top of the latest crypto credit card developments.

Written by

Steven Dashiell

Senior writer

Steven Dashiell is an editor for Bankrate and CreditCards.com and formally a personal finance writer at Finder, specializing in credit cards, banking and growing and protecting your income. His insights and expertise has been featured on Nasdaq, U.S. News & World Report, Time, CBS, ABC, Fox Business, Lifehacker and Martha Stewart Living, among other top media. Steve holds a BA in English from University of Maryland, Baltimore County, minoring in composition and rhetoric. In his spare time Steve nerds out on birds, paints and plays a whole lot of Street Fighter. See full bio

Steven's expertise

Steven has written 60 Finder guides across topics including:

• Credit cards
• Budgeting and saving
• Rewards programs