Talk about cryptocurrency spreads like wildfire these days, with major investors like Elon Musk and Carl Icahn putting their money into blockchain and crypto startups.
The total crypto market capitalization hovers near $2 trillion, and businesses across lanes are beginning to see the value in working together to bring crypto to the masses (and that’s great news for you).
More customers demand a simple, quick, and inexpensive way to pay for everything from a new vehicle to a cup of coffee with their crypto. Spotting the trend, some companies have begun providing crypto credit cards.
But what are crypto credit cards? Our guide shares the basics of crypto credit cards, including reviewing the top five best crypto credit cards on the market.
What is a Crypto Credit Card?
A crypto credit card is like a traditional plastic debit or credit card that connects directly to your cryptocurrency wallet (usually via the card provider’s app). As you make transactions, those funds transfer from one account holder to another in real-time, often (but not always) using blockchain technology.
This payment type is particularly useful for individuals who want to use their cryptocurrencies at businesses and merchants that don’t yet accept crypto as alternative payment options.
Most crypto credit card providers offer digital wallets to store your coins and tokens, accessible from an app on your phone or via an internet browser.
Why are crypto credit cards getting popular?
Cryptocurrency is growing more popular every day, with about 46 million Americans owning Bitcoin (17% of the adult population). Travelers can now exchange cryptocurrencies at thousands of destinations across the globe — and spend their crypto on a variety of products, from hotel rooms to meals.
For these reasons, crypto credit cards, which let you easily pay with or convert cryptocurrencies into traditional currency, are becoming increasingly popular.
How do I Apply for a Crypto Credit Card?
Luckily there are many sites online where you may purchase crypto credit cards (we’ve included a list for different crypto credit cards below). As long as you’re willing to pay the associated annual fees, most of these services will allow you to apply online and access a virtual card immediately.
Most card providers will require you to download an app to apply for and set up your card. A few companies have different tiers of cards based on fees or more complex requirements, such as “staking” the company’s native token.
What are the Benefits of Crypto Credit Cards?
Crypto credit cards allow you to pay for goods and services with crypto. The long debate over whether we can use Bitcoin to buy a cup of coffee appears to be over, as long as you’re willing to take the capital gains taxes.
There is no need to manually convert into fiat and wait for confirmations and all that before spending — just swipe the card, like any other Visa card!
The ability to earn crypto on every purchase is a game-changer. It may help soften the tax blow when converting your crypto into a fiat currency. Plus, it’s an excellent incentive to keep stacking crypto in the long run without putting too much thought into it.
The Five Best Crypto Credit Cards in 2021
The best crypto credit cards are those with the lowest fees and rewards. This article reviews five top crypto credit card providers, including TenX, Nexo, Crypto.com, Monolith, and Bankera. We also cover two honorable mentions, Coinbase and BlockFi.
The Nexo card (now open to register for early access) rewards holders with a competitive APR and instant 2% cashback on all purchases. Users can choose to receive rewards in NEXO Tokens or BTC for each transaction.
Touted as “the only card that lets you spend the value of your digital assets without having to sell them,” Nexo is accepted worldwide by more than 40 million merchants. It also allows for easy payments in local currencies.
Nexo’s flexible repayment options and the ability to obtain free additional virtual cards are very useful for making online purchases.
The Nexo card has zero monthly and annual fees and no foreign exchange fees.
The Nexo Card can be ordered and managed from the comfort of the Nexo Wallet App, giving you instant worldwide access to your credit line.
The Nexo card comes with some neat security features, such as “military-grade” encryption and 24-7 fraud monitoring. For example, you can monitor all of your transaction fees in real-time, and you can freeze and unfreeze your Nexo card with a single touch.
Crypto.com Visa Card
The Crypto.com Visa Card is not exactly a credit card. Rather, it is a prepaid card or a debit card. Debit cards link onto a bank account, but users must top up their prepaid cards. Crypto.com allows you to top up your card with bank account transfers, other credit/debit cards, and cryptocurrencies.
Your Visa Card comes with a competitive rewards and benefits program. Depending on your card tier, benefits may include purchase rebates on airline bookings, Amazon Prime purchases, Spotify and Netflix subscriptions, AirBnB bookings, and general spending rewards (up to 8% back).
Another unique element of the Crypto.com Visa Card is that the company requires users to stake CRO tokens for 180 days to apply for the card. For this reason, we suggest that you begin learning about this card early to decide if the staking period is right for you.
To apply for the Visa Card, register your Crypto.com app account and complete their KYC verification. The next step is to purchase CRO tokens and deposit them into your Crypto Wallet in the Crypto.com app.
You will also be able to purchase CRO directly in the app. The amount of CRO required to stake depends on the card tier.
Applying for a Crypto.com Visa Card is a multi-step process, so be sure to read the company’s FAQ to decide which card tier is best for you.
The Crypto.com card requires a bit of effort on the user’s part, and you’re required to continue staking a minimum amount to keep the perks of your selected card tier. For these reasons, we’d suggest only people familiar with how cryptocurrencies and staking work before applying for this card.
Monolith is a new entrant into the crypto debit cards space, offering cashback rewards and low fees. Monolith’s “Ethereum smart wallet” allows you to store and spend your crypto tokens anywhere you want conveniently.
Similar to the Crypto.com Visa Card, you’ll need to top up your debit card using the DAI token, which is purchasable at competitive rates in the Monolith app. After that, you can spend your tokens as fiat anywhere.
The main fee to watch out for when using the Monolith debit card is the Ethereum “gas” fees. These fees vary depending on the Ethereum network conditions and accrue during top-ups and cryptocurrency swaps and purchases.
The Bankera card is a Visa debit card with no maintenance fees and high spending and cash withdrawal limits. Like the other cards in this list, the Bankera card allows you to make purchases anywhere in the world where Visa cards are accepted, with competitive exchange rates. Plus, you’ll get three free ATM withdrawals per month.
You can apply for a virtual or physical card, but registration will get you an account within minutes. Do you represent a business? Bankera has you covered with their Corporate Visa debit card.
Bankera takes security seriously, allowing customers to disable and enable contactless use and online payments directly from the app. You’ll be able to set your daily spending and cash withdrawal limits and easily lock your card if it goes missing.
The TenX Card works like other cards on this list. Perks include ATM cash withdrawals, no foreign exchange fees, easy swapping between crypto wallets, and being usable anywhere Visa is accepted.
To order a TenX card, you’ll need to register for an account using the TenX app and follow the company’s step-by-step instructions.
Crypto Credit Card Honorable Mentions
Below are a couple of crypto credit cards worth adding to the list.
Because it’s the largest on-ramp for cryptocurrency purchases on the internet, Coinbase’s card is hardly an honorable mention. Still, we want to give some light to the alternatives out there. The Coinbase Card allows you to fund your card with your Coinbase balance and withdraw cash from any ATM.
You can easily switch crypto wallets and monitor your card security from the Coinbase app, which serves as a top-of-the-line spending management tool.
Like the other options on this list of crypto credit cards, Coinbase Card’s charm is its suite of other online and app-based services, such as earning interest on your crypto. Like a credit card that directly benefits your investment portfolio, users take advantage of their crypto holdings in everyday life, all while earning rewards and interest.
Cardholders can now use their cards with Apple Pay and Google Pay. Lucky customers chosen from the waitlist can begin earning up to 4% back in crypto rewards.
Mobile phone payments are riding a strong upswing, up 29% in 2020. Millions of people globally use Apple Pay or Google Pay for everything from office supplies to pet food. So it makes sense that Coinbase would bridge traditional online payment services with its crypto gateway.
Now waitlisting, Blockfi deems their card as having “the smartest rewards on the planet.” Users can earn BTC on everyday transactions (1.5% and then 2% on every purchase over $50,000 of annual spend) and move your rewards directly to a BlockFi Interest Account.
Card owners can earn 3.5% back in BTC during their first three months of card ownership, and there are no annual or foreign exchange fees for using this card.
Why are crypto credit cards becoming popular for businesses?
Crypto has come a long way since its inception just twelve years ago. From being a niche market for geeks and tech-savvy individuals, it has become a multi-billion dollar industry — and one that is still growing rapidly.
This increase is attributed to several factors, such as the ease of use for consumers and merchants and low transaction fees. In addition, crypto’s “borderless” payments live in a grey area of foreign currency laws and international banking transfer limitations. All of these characteristics play into crypto’s popularity.
But what does this have to do with businesses? For one thing, these cards offer an easy way for companies to start accepting cryptocurrency payments without the need for complex technical integration.
They also allow business owners who want access to their digital assets at any moment they choose without dealing with complicated exchange rates. For example, plenty of businesses would groan at making regular purchases through spot exchanges like Coinbase.
Crypto credit cards flip that on its head, allowing businesses to earn rewards on their purchases while also providing an easy way to earn interest on company assets.
Are Crypto Credit Card Transactions Taxable?
The taxability of crypto credit card transactions is a complex question. To date, the regulators in different countries have made different declarations. Still, we can assume the IRS and other regulators intend to get their slice of the pie eventually.
According to the IRS, all crypto-to-fiat transactions are taxable events. When you pay with a crypto credit card, you’re converting cryptocurrency into fiat (e.g., USD, EUR, AUD) to complete a purchase.
The IRS requires you to pay a capital gains tax when purchasing with a crypto credit card. In other words, if the crypto you are using is at a higher price at the time of the purchase than when you acquired it, you’ll be taxed based on the difference.
Business owners who use cryptocurrencies as part of their work can speak with an accountant about taxation before using a crypto card if tax concerns weigh heavily upon them.
We hope this article has helped you in understanding the benefits of crypto credit cards!
If you have any questions or comments about these cards, please join us at AlphaTradeZone and start a discussion! In our community, you’ll learn more about crypto and how to take advantage of our one-of-a-kind crypto signals group.
Enjoy shopping with crypto!