Crypto Credit vs Debit Cards
Crypto Basics

Crypto Credit vs Debit Cards

Created 1yr ago, last updated 1yr ago

This week, CoinMarketCap Academy explains the difference between crypto credit and debits cards. Not sure which one you should go for? Let's find out!

Crypto Credit vs Debit Cards

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The real-world use cases of crypto are only growing. For example, Binance recently announced a ride-hailing service on its mobile app. So, if you do not have a crypto credit card yet, it might be time to get one.
  • But what is a crypto credit card?
  • How do crypto debit and credit cards work?
  • And what is the difference between crypto credit and debit cards?

CoinMarketCap Academy answers all these questions in this guide to crypto credit vs debit cards.

What Is a Crypto Credit Card?

With crypto credit cards, you borrow money from the card company just like with a regular credit card — it is still a credit card, after all. However, the big difference between regular credit cards and crypto credit cards is the crypto rewards.
For example, you can receive points for making a purchase with a crypto credit card (just like with some credit cards). The bigger the value of the purchase, the more points you receive. But with a crypto card, the point balance can then be converted into cryptocurrency. Another way to make use of your crypto credit card is getting rewards directly in cryptocurrency. For instance, the card company may pay you 1% cashback in BTC on all purchases.

Of course, there are usually a few more snags to it, but that is the basic way crypto credit cards work. For risk-averse people that just want to get their feet wet with crypto, these cards can be a way to get started.

How Do Crypto Rewards Cards Work?

In principle, there is no difference between a crypto credit card (crypto rewards card) and a regular rewards card. When you make a purchase, you earn cashback on both cards — only the crypto rewards card pays you in cryptocurrency. This way, you can acquire crypto without buying it. Of course, the rewards will not be massive, so how much you acquire depends on your spending habits.

Although some retailers accept crypto — and probably more will in the future, if the past is any indication — you still have to pay with fiat currency at most places. This fiat paymnet issue highlights another advantage of crypto rewards cards — they let you spend the crypto you accumulated. Since all the crypto rewards cards use the big payment processing networks like Visa, Mastercard and others, this could be your opportunity to use your crypto instead of just letting it idly sit there (if HODLing is not your thing).

What Are Crypto Debit Cards?

Crypto rewards debit cards are essentially the same as crypto rewards credit cards: they let you accumulate crypto cashback on your spending. Instead of accumulating points with a regular debit card (which you may not be able to convert into cash), you can accumulate cryptocurrency with a crypto rewards debit card.
The cryptocurrency accumulated on the crypto rewards debit card converts into your fiat currency of choice when you spend money. However, the rewards are always accumulated in crypto.

Just like with crypto credit cards, these debit cards operate with Visa and Mastercard and can be used wherever they are accepted (which is a lot of places). Moreover, you will be able to withdraw cash from these cards as well.

Crypto Credit Cards vs Crypto Debit Cards

The biggest difference is obviously your credit line with crypto credit cards. The size of your credit line depends on the eligibility criteria set by the issuing institution.
Another key difference is that some crypto debit cards come with a proof-of-stake obligation — and this could be confusing to crypto newcomers. Basically, this means that the card requires you to put down some cryptocurrency (stake) in order to use the card and get rewards. What cryptocurrency you need to stake depends on the issuing exchange or card company. The more crypto you have staked, the bigger your potential rewards. This can be quite risky if you stake a lot of coins and the market takes a turn for the worse.
On the other hand, your credit history doesn't get checked for a crypto debit card. So, crypto debit cards are offered to everyone, while crypto credit cards are not. Moreover, both cards allow ATM withdrawals and are usually accepted just as widely as regular debit or credit cards.

Should I Get a Crypto Credit or Debit Card?

Whether you go for a crypto credit card or debit card depends on your spending habits and credit history. You should look at the following points when choosing a card:

  • The rewards rate;
  • The annual fee;
  • Other fees like ATM withdrawal fees;
  • Other benefits or perks coming with the card;
  • Withdrawal and spending limits;
  • Staking requirements.

There is no one-size-fits-all solution. You can also buy cryptocurrency with your cashback from a regular rewards card if you don't want permanent exposure to crypto. That could make sense if the regular rewards card offers a higher percentage of cashback than crypto cards.

Moreover, crypto can be volatile, so the value of your rewards could go down over time (but it could go up too). That type of investment is maybe not for everyone. You should check out the terms and conditions of different cards diligently before making a decision, particularly if you do not spend a lot of money or if your credit history is not the best.

The Best Crypto Cards

CoinMarketCap Academy has already covered the best crypto cards. However, here is a quick TLDR breakdown of the crypto card options you have:
  • Card: an all-around option available in over 100 countries worldwide.
  • Binance Visa Debit Card: a card good for Europeans with high pending limits.
  • Coinbase Debit Card: a good card for US customers without withdrawal fees.
  • BlockFi Crypto Credit Card: a rewards card offering BTC cashback.
  • Wirex Crypto Card: a cashback option for travelers.
  • Nuri Crypto Card: a card with high ATM withdrawal limits for Europeans.
  • Monolith Crypto Debit Card: a non-custodial Visa card for European Ethereum fans.
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