What are cryptocurrency cards?
For several years now, many exchanges and other centralized finance platforms have offered the possibility of obtaining crypto cards. Through this tool we are able to spend the cryptocurrencies we hold, as well as opt (in some cases) for simple fiat currency.
Crypto cards rely on traditional payment circuits (Visa and Mastercard above all), ensuring worldwide service coverage.
While being able to purchase goods by paying in cryptocurrencies is an achievement in itself, users point to a rather common benefit: getting crypto cashback from each of their expenditures. In fact, crypto cards with cashback are depopulating and give people the chance to see a small percentage of their spending return to their pockets. In some cases, the return increases and even touches 2/3%, a respectable figure.
So let’s find out how the cards work and cost, and then do a quick roundup on the most popular ones at the time of writing. You will also find links to dedicated in-depth articles, so you can learn more about the one that interests you most.
Index
How do crypto cards work?
The logic behind these cards is quite simple, but first a clarification is in order that will unfortunately destroy the dream of many: by using a prepaid card like this we are not really paying the merchant in bitcoin or Ethereum, nor are we using the networks to accomplish the transaction.
Instead, we are doing worse, namely selling our cryptocurrencies at the market price to switch to euros or dollars. After that, the card uses the circuit it relies on to make the payment.
Of course, all these operations are done automatically and instantaneously by the crypto card and do not require our attention.
We must therefore remember that so-called crypto credit (or rather, debit) cards are not what they might seem at first glance.
In some cases it is possible to load the card with euros, without going through any cryptocurrency. By doing so, we can continue to benefit from the advantages offered by the card, but without making the step of selling cryptocurrencies, considered by many to be “painful.”
Then there are other mechanisms, such as those governing the Nexo Card, that can preserve crypto capital and, at the same time, make their own purchases. However, let us go in order and take a look at the costs.
The costs of crypto cards
When we pay with a crypto card we should not forget that we are making a transaction at market price. The platform, to protect itself from slippage, may charge an additional fee.
Slippage is nothing more than the price fluctuation that a coin can have during the market purchase phase.
For example, if the price of BTC while I am making a purchase dropped from 40k to 39k, there would be a 2.5 percent loss. The platform has to protect against this sudden drop, but also against all other small or large changes in the market. To do this, a fee ranging from 0.5% to 1.5% is charged on the payment made through the card.
To “break even,” the same platforms provide cashback that goes to totally cancel the cost of the transaction fee. Clearly, not all cards apply these terms: it depends on the one you have chosen.
Going back to cashback, it is nothing more than a refund of money that the platform credits us with once the payment is successful. It is not always disbursed automatically: each card has terms and conditions to meet, such as the need to stake a certain amount of cryptocurrency to be eligible for the benefits offered.
Finally, watch also for the costs that can result from withdrawing at an ATM. Leaning on circuits such as Visa and Mastercard, it is very likely that we will have to shell out a fixed or variable fee depending on the amount. In any case, let’s consult well all the items related to fees so that we don’t have any nasty surprises at the time of use.
Best crypto card
Different exchanges offer their own alternatives. Some are crypto cashback cards, while others offer different solutions. Let’s take a look at the main ones: Binance, Crypto.com, Bitpanda, Nexo, and ByBit.
Remember to come back to this article periodically: we will keep it updated and add more crypto cards that may be right for you.
Binance Card
The Binance Card is most likely the best known in the industry, appreciated by many users. Both euros and cryptocurrencies can be loaded onto it; by making purchases, the cryptos will be converted in real time, exactly as we said before.
The card relies on the Visa circuit, making it accepted in a huge number of online and physical merchants scattered around the world.
Based on the BNBs held, the card gets a certain level. As the latter increases, so do the cashback limits to which you are entitled, as well as the percentages. That’s right, you got it right: Binance ‘s is a crypto cashback card that returns a portion of the spend to the user.
Zero fees and issuing costs to top it off: with a few exceptions, (crypto-euro conversion and loss), the card is completely free.
Up to this point all beautiful, but unfortunately we have bad news: the card is no longer functional in EEA (European Economic Area) as of midnight on December 20, 2023. The provider on which Binance relies has decided to stop the service, and the exchange has no choice but to discontinue the functions of the card itself. We do not know if this is a permanent farewell or just a pause while waiting for another provider.
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Crypto dot com card
One of the best alternatives to the Binance card is that of Crypto.com; or rather, we should speak in the plural, because the proposal is really wide.
We start with the Midnight Blue, a free card that does not give any advantage, however, going up a level to exclusive products such as the Obsidian, which requires a CRO stake worth a minimum of 350,000€. In between we then find good alternatives such as Ruby Steel, or the Royal Indigo and Jade Green combo for those who want something more.
This selection of cards entitles cardholders to variable benefits such as cashback, partially or fully refunded Spotify and/or Netflix subscriptions, airport lounges , and more.
Again, the circuit is Visa, a guarantee.
For those who also seek beauty and are design-conscious, Crypto dot com ‘s cards are all metal and highly curated-you certainly won’t go unnoticed.
Competitive exchange rates and fees make it a great choice for everyone.
Bitpanda Card
Europe’s largest exchange has certainly not been watching the competition and has long since launched the Bitpanda Card.
What makes this payment medium interesting is the possibility of also spending stocks and metals, in addition to fiat currencies and cryptocurrencies.
No processing fees, cashback possibilities according to certain parameters, and all the security of the Visa circuit.
Nexo Card
We turn to the Mastercard side with the Nexo Card, which arrived in our country in the first half of 2022 after years of waiting.
This is an absolutely unique card because it allows us to make purchases without spending our crypto.
In fact, the card designed by the famous Nexo platform allows us to have access to credit lines. Basically, the digital assets we hold on the platform act as collateral and allow us to make purchases.
The euros (or other fiat currency) that the user spends come from Nexo, which actually lends them out. One can go so far as to set a very dangerous LTV, as high as 90%. However, staying below 20% means no interest is charged for the loan.
We have created an article that explains in detail how the Nexo Card works : take a look at it.
Bybit Card
The famous exchange ByBit also has its own card.
Visa circuit and similar features to other colleagues: possibility of spending cryptocurrencies by instant conversion to euros or other fiat currency, or direct use of previously deposited traditional currency.
Like all crypto cards, it is a debit card, which is not to be confused with an actual credit card. While debit cards immediately deduct money from one’s account, credit cards generally charge the amount the following month (hence the term credit).
Available in both virtual and physical versions, the ByBit card is free (subject to fees) and allows you to have an extra weapon in your wallet.
Conclusions
Crypto cards are no longer new, and over time many CeFi entities have integrated them into their services.
Considering the negligible costs and the possibility of taking home some crypto cashback, owning one or more is certainly beneficial.
Keep following us: we will be adding more and more crypto cards to our “collection” of articles, talking about the features of each and having our say on the relative pros and cons.
