Last updated on March 7th, 2023
Although cryptocurrency, such as Bitcoin, has been around since 2009, crypto credit cards have only been around for a few years. The new crypto wave and even the latest NFT frenzy have come a long way. And although crypto has been part of popular financial conversations, the idea of crypto credit cards may not be a familiar topic among credit cardholders. So, how do crypto credit cards work? Here’s what you need to know.
Akin to Traditional Credit Cards
With most fiat currencies, investors invest and make the currency work for them. That is where crypto credit cards come in. Crypto credit cards are not only for investors. They are also a more accessible way for someone to start diversifying their crypto portfolio.
If you’re familiar with cash back credit cards, then you’re off to a great start at understanding crypto credit cards. There are a few on the market, and the basis of the crypto credit cards is for cardholders to earn crypto rewards when they make purchases.
Consider The Gemini Credit Card™, for example. The crypto earning card earns rewards in 60+ cryptos on every purchase. Cardholders can earn up to 3% back in crypto on purchases depending on the spend category, such as dining, groceries, and more.
Comparable to rewards or points earned with cash back credit cards and travel cards, The Gemini Credit Card™ earns back rewards in cryptocurrency. The flexibility of the card lands on the crypto coin options. As previously mentioned, you can earn crypto rewards in 60+ different cryptocurrencies supported by the Gemini platform, such as Bitcoin, Ethereum, Solana, and more.
What Happens After You Earn Crypto
So, you’ve done some shopping with your crypto credit card and have earned plenty of crypto rewards. What’s next? After earning crypto rewards with a crypto credit card, the crypto goes into the cardholder’s card account. For example, after earning rewards with The Gemini Card, your earned crypto is instantly deposited into your Gemini account. You can also transfer crypto rewards from your account to a cryptocurrency wallet.
However, the instant crypto rewards provided by The Gemini Card are a unique feature. All other crypto credit cards disperse earned crypto rewards monthly. For example, the Upgrade Visa® Card with Bitcoin Rewards deposits the earned crypto rewards after the cardholder pays off their monthly balance. Once your crypto rewards are in your account, you are free to trade or HODL your crypto rewards.
Do Crypto Credit Cards Affect Credit Scores?
Everything else about crypto credit cards works like traditional credit cards, including credit card fees, interest rates, and payments. And probably the most significant factor is that crypto credit cards will affect your credit score the same way as traditional credit cards. Additionally, cryptocurrency is considered an asset. Therefore, if you have plans to trade and earn large amounts of it, then mind your taxes and consult with a tax professional.
The Bottom Line
In conclusion, crypto credit cards provide flexible access to create a more diversified portfolio for the person interested in the world of cryptocurrency. There are a few crypto credit cards on the market, including crypto debit cards like the Coinbase Debit Card. Or maybe you’re interested in going the prepaid route with something like the Fold Visa® Prepaid Card. Wherever your crypto journey takes you, understand crypto credit cards are here to reward you on your everyday purchases with a little more than just regular old cash back.
Related Article: The Best Credit Cards for Investing