CoinDepo: How Do Crypto Credit Cards Work?
Cryptocurrency allows one to trade, invest, and exchange goods and services. Another innovation that cryptocurrency brought is the crypto card. Let’s learn more about how these work.
As cryptocurrency acceptance and recognition grow, more and more services that allow to make typical transactions, such as selling cryptocurrency, investing it, or using it to pay online or in offline stores, start to appear on the market. Along with crypto ATMs, you will see many providers offer a crypto card, which works a lot like regular payment cards, to make the use of cryptocurrency even more convenient.
Cryptocurrency Cards
One of the problems with cryptocurrencies is it is not convenient to use in daily life. If someone wants to spend BTC, ETH, USDT or USDC, they must either convert them to national currency or find someone who accepts the cryptocurrency. Tens of thousands of stores do accept cryptocurrency, but there are even more that do not. When you check out on Amazon, you won’t see Pay with Bitcoin.
However, every merchant already has a way to accept payments via credit or debit cards. This is where a crypto credit or debit card comes in handy. The user of such a credit or debit card can make a purchase or pay for services using cryptocurrency while the merchant receives dollars, euros or other national currency. Meanwhile, the card provider works as an exchange behind the scenes. In five or ten years, most merchants will likely accept cryptocurrency directly. However, for now, a cryptocurrency credit or debit card is a simple solution that allows people to spend crypto anywhere they want.
Popular Crypto Debit Cards
Here is a brief overview of existing crypto debit cards.
1. Binance Card. The Binance cryptocurrency exchange offers a Visa card that may be used to make purchases anywhere Visa is accepted. Integration with Google Pay and Samsung Pay is available.
2. ByBit. It offers a MasterCard crypto debit card that is linked to ByBit account. The card is available in the UK and EU. ByBit Card supports two fiat and five crypto currencies.
3. Crypto.com. There are prepaid debit cards with several tiers that provide different privileges, from bonuses paid in CRO to subscriptions to online services and access to airport lounges.
4. Coinbase Card. Linked to your Coinbase account, the Visa card is available in the US and most European countries.
5. AdvCash. AdvCash is one of the oldest payment services. The AdvCash Bitcoin debit card can be acquired and used in most jurisdictions.
6. Wirex. Wirex Visa allows users to manage both fiat and cryptocurrency accounts, as well as exchange cryptocurrency for fiat without intermediaries. Users can earn cashback rewards.
7. Crypterium. It offers virtual and physical prepaid debit cards. You can use the card anywhere in the world where Visa is accepted. Crypterium crypto card is available in 30 countries.
8. Revolut. The Revolut card works like a standard Visa bank card and is available on both Visa and Mastercard. It supports both traditional currencies and crypto.
9. CryptoPay. The CryptoPay prepaid card connects cryptocurrency with traditional finance. Virtual and plastic Visa cards are available.
10. BitPay. The prepaid card supports 15 cryptocurrencies and tokens. You can top up through your BitPay wallet or Coinbase account. As of July 2023, applications are suspended, but you can get on the waiting list.
Crypto Credit Cards and How They Work
A debit card with a crypto balance is great, but what about a crypto credit card? These cards work almost the same, but if we take a closer look, we will find that there are major variances. The primary distinction between the two is the pre-loading of digital assets into the crypto debit card provider’s wallet in order to subsequently be able to make fiat currency purchases using that card. At the moment of making a card transaction, the user’s crypto assets are exchanged for fiat money at the current and not always favorable rate and are debited from the user’s crypto balance.
A cryptocurrency credit card is essentially identical to a regular credit card in every regard. The crypto company grants consumers a crypto card. This card may be used for transactions if the other party accepts Visa or MasterCard payments.
What’s unique about a crypto credit card is that instead of giving cardholders perks like regular fiat cashback, airline miles, or free gift certificates, crypto card users can earn crypto rewards. For example, the CoinDepo Crypto Credit Card gives users up to 8% rewards in the form of instant crypto cashback on every purchase, with no restrictions on the amount or number of transactions. It also has a 500 USDC bonus for users who spend $3,000 using the CoinDepo Crypto Credit Card within the first 3 months.
Unlike other crypto cards, CoinDepo offers an Instant Credit Line for its crypto card that can be repaid at any time without requiring users to provide collateral or open a collateral account. Instead, users simply need to deposit their digital assets into CoinDepo Compound Interest Accounts, which will continue bringing interest income even after the user begins using the CoinDepo Instant Credit Line with their crypto card. Interest rates on CoinDepo Compound Interest Accounts significantly exceed the rates offered by traditional financial institutions and range from 12% to 24% per annum (APR). By keeping (reinvesting) regularly paid compound interest in the account, the user’s real annual interest income (Annual Percentage Yield, APY) will be even higher due to the effect of compound interest.
Moreover, the crypto cashback received as a result of using the crypto credit card starts to instantly earn interest. As a result, the user is able not only to cover the credit card fees but also to earn additional funds in the form of interest payments.
Crypto credit cards allow you to spend cryptocurrency and receive rewards, typically in the form of cryptocurrency. With these rewards, the providers hope to promote wider acceptance of the crypto cards across the world. While this may seem normal today, we haven’t had such an easy, quick, and rewarding way to spend cryptocurrencies for several years.