The digital asset space has taken long strides in bridging the gap between traditional bank products and crypto-linked consumer products.
One product finding traction is the crypto credit card space. For consumer bankers, bank credit cards can be costly and hard to come by.
Crypto credit cards provide consumers a viable alternative, with crypto exchanges offering credit card products to lure consumers from the more traditional banking space.
With the number of available credit card products on the rise, prospective users should conduct the necessary research to make the right choice.
Considerations in choosing a crypto credit card include:
Annual fees.
Crypto market volatility can eat into the rewards and usefulness of crypto credit cards.
Partnerships with established issuing banks and networks, including Mastercard and Visa.
Rewards schemes, including cash back and point redemptions.
The annual percentage rate (APR).
Five crypto credit cards popular in the US include:
Variable APR for purchases ranging from 8.99% to 29.99%.
Requires a credit score of “good” to “excellent.”
Issuing bank is Sutton Bank.
Additional benefits of the Upgrade card include:
Intro $200 bonus when you open a Rewards Checking account and make three debit card transactions.
Multiple card options are available, catering to consumer needs. These include,
Cash Rewards: Unlimited 1.5% cash back on payments.
Triple Cash Rewards: Unlimited 3% cash back on payment for purchases in the Home, Auto, and Health categories.
Bitcoin Rewards: Unlimited 1.5% back on bitcoin payments.
Upgrade Card: Get the credit you need with no fees.
Chip-enabled contactless card.
Negatives include:
High APR.
Rewards in bitcoin, leaving cardholder rewards exposed to market volatility.
Users cannot transfer bitcoin rewards to a separate wallet. Sales of bitcoin are subject to a 1.5% transaction fee.
Venmo Credit Card
No annual fee.
No foreign transaction fees.
3% cash back on groceries, 2% cash back on bills & utilities, and 1% cash back on all other spending.
Variable APR for purchases ranging from 11.99% to 20.99%.
Requires a credit score of “good” to “excellent.”
Issuing bank is Synchrony Bank.
Additional benefits of the Venmo card include:
Rewards in dollars and exchangeable to crypto.
Card holders can define preferred crypto rewards by selecting four cryptos. Venmo automatically converts fiat to crypto without any crypto transaction fee.
Unique Venmo QR codes allow Venmo friends to scan to pay or get paid.
Contactless Visa card to pay on touch-free enabled terminals.
Visa and Visa Signature perks.
Negatives include:
1.75% transfer fee for instant electronic withdrawals to a linked debit card or bank account.
High APR.
Users cannot transfer crypto from Venmo to another exchange or an external wallet.
In conclusion
The crypto credit card space is ever-growing. While the crypto winter has affected the crypto credit card market, the crypto credit card space is likely to evolve in the years ahead, supported by increased crypto adoption and growth in the DeFi space.
As the market evolves, users will likely benefit from a wider range of rewards.
However, for some crypto market volatility and the possible erosion of crypto rewards remains an issue. As the crypto market matures, volatility may also flatten out, which would draw more users across from more traditional credit card products.
Fees, transferability, and rewards will continue to be the key considerations, as is the case for fiat credit cards.
