The Bitcoin logo is still very rarely seen in stores or at issuing points, in addition to the common credit card providers. But in Asian countries or even in El Salvador, where Bitcoin is considered an official means of payment, the acceptance is much higher. For many, cryptocurrencies are not simply “just” exciting investment opportunities, but they invest their money in the coins because they do not trust the central banking system. With the right credit card, one can then use the cryptos as a means of payment. Most apps or platforms that allow you to create a wallet also offer the right credit card. But are they worth it?
Crypto credit cards work like normal credit cards, only for cryptocurrencies. Thus, Ethereum and Bitcoin become payment options that hardly differ from classic methods. Digital money becomes a value in real life. This also makes the coins “more real,” because there is cash behind them. Mastercard could soon even go one step further and offer a loyalty program. That’s because the company has partnered with digital asset platform Bakkt. So instead of points and miles, risk-taking investors* could earn rewards that can be redeemed for specific cryptocurrencies. All of these operations will increase the adoption of coins, and just in case, you should once again expand your crypto vocabulary.
Aside from the fact that there are numerous colorful cards, they fall into one of two categories.
The wallet is the account. This is where the coins are stored and held. When you make a payment, the corresponding amount is debited in Bitcoin at the current rate. But this also means that if you have X amount in the wallet on one day, it can be more or less the next day, depending on the exchange rate.
So far, there are still few acceptance points for this Walltet credit card, because you can only pay with Bitcoin in a few stores. You can usually tell if Bitcoin is accepted in a store by a Bitcoin logo next to the logos of the credit card companies.
This type of credit card is much more common. It works, like a mobile recharge card. You transfer the Bitcoin amount from your wallet to the card, and the amount is converted directly at the current rate when you top it up. Payment is then made with the credit card currency, such as the euro. These cards are also often offered together with a wallet.
Numerous apps and platforms that offer cryptocurrency trading also issue their own credit card. The advantages are clear, albeit limited. With the right credit card, you can use Coins in everyday life. But especially in Germany, the acceptance is still very low. It will hardly be possible to pay for coffee to go or dinner at your favorite Italian restaurant. There is usually two-factor authentication and e-mail/SMS notifications when a purchase is made. Especially for beginners, there is little risk in using it, because (so far) there are only debit cards. This means that only what is in the account can be spent, and the debit happens in real time – just like with a classic checking account, without overdraft facility. Debt is therefore not possible. Almost every crypto card supports Bitcoin and Ethereum, rarely more than five currencies are supported by one provider. The lower the market capitalization of the currency, the less likely it is that providers will allow payments with the coin.
Many crypto credit card providers make the cards palatable to their clientele by offering numerous bonuses. While some credit cards offer airline miles or cashback, crypto-credit cards promise rewards in the form of bitcoin and other coins. But memberships for Netflix, for example, are also possible.
When it comes to Coins, the term digital money is used over and over again. So it only makes sense that Bitcoins and Co. can also be used for payment in real life. The credit cards have high security standards and are based on the exchange rate in near real time during the transaction. That sounds all well and good in itself, but there are hardly any places in Germany where they can be used. That’s why you should think carefully about the cases in which you want to use the card. The fees for various services also differ from provider to provider. In many cases, it is easier to sell part of the coins in the wallet and pay the amount to the distribution account. But in these cases, the fee for the sale must also be considered. Especially for small amounts, this makes sense. However, if the wallet bursts and there is so much money on it that you can cover your everyday life with it, then the purchase of the crypto credit card may be worthwhile.