How cryptocurrency credit cards work
Cryptocurrency credit cards are becoming increasingly popular, allowing users to conveniently pay for goods and services with digital money. This is possible thanks to the cooperation of cryptocurrency exchanges with major payment systems such as Visa and Mastercard.
Cryptocurrency cards work just like traditional cash cards. And there are both debit and credit cryptocurrency options, where payments can be made with borrowed funds. These tools are suitable for both online and physical purchases. In addition, payment processors often partner with various stores to offer customers discounts or rewards in digital currency for purchases made with fiat money. Remember that the use of cryptocurrencies also affects your credit rating.
Features of cryptocurrency cards
There are 4 operators of such tools:
– American Express;
– Visa;
– Mastercard;
– Discover.
These operators process transactions and enter into agreements with companies that accept digital currency payments. It is important to understand that not all stores that accept regular Visa or Mastercard payments can accept cryptocurrency payments. This information is usually stated separately.
Approximately 38% of all cryptocurrency cards worldwide are cryptocurrency credit cards. Standard debit options include Crypto.com, Swipe Visa and others, while credit cards include SoFi, Gemini and various types of Visa.
Approximately 5% of US citizens (13 million) have a cryptocurrency credit card with a cashback option. This allows a person to earn rewards for purchases that can be used as discounts on goods and services.
The most common digital currency used for transactions is Bitcoin. This currency is available on all cryptocurrencies.
Card statistics:
– in 2021, the total value of all transactions using these tools exceeded USD 1 billion;
– Visa cryptocurrency payments reached USD 2.5 billion in the first quarter of 2022;
– within 5 years, the number of crypto card users will grow by 40% per year;
– more than 70% of users are male;
– more than 80% of cardholders invest in multiple types of cryptocurrencies.
Cashback for cryptocurrency cards
This rewards option works in the same way as fiat money. In this case, the points you earn are converted into digital currency. Most operators offer a reward of 2% of the purchase amount. For example, if you use a NEXO card, you can get 2% cashback for NEXO currency and 0.5% for bitcoins. On the NEXO platform, it is also possible to open a credit line from 0 to 14% per annum. Visa offers a cashback of 1.5-2%, with the value varying according to the amount spent. Venmo offers 1-3% cashback, depending on the maximum card spent. It is paid in various cryptocurrencies, including Ethereum and Bitcoin.
