Rewards credit cards are highly attractive and have quickly become one of the most preferred payment methods. People earn rewards when they use these cards to purchase goods.
These rewards are typically cashback and travel miles. However, a new credit card type is set to change things.
What Is A Crypto Credit Card?
Crypto credit cards are a recent innovation that rewards users in the form of their favorite cryptocurrency. Currently, these credit cards are issued by the most popular banks, crypto exchanges, and crypto brokers.
A crypto credit card is no different from any other rewards credit card, like the one that offers you points, cashback, or other such rewards in exchange for using the card to make purchases. They all operate the same way a regular credit card does.
However, instead of giving you rewards in the form of points or cash back, a crypto credit card gives you rewards in the form of your favorite cryptocurrency. Most often, these crypto credit cards are issued by a bank but marketed by a crypto exchange or other such crypto-related brand.
How Does It Work?
As mentioned, crypto credit cards give rewards in the form of cryptocurrencies. Anytime you swipe this card to make a purchase, the issuer purchases your predefined preferred cryptocurrency as a reward and sends it to your associated crypto account.
However, the choice of cryptocurrency may be limited depending on the type of crypto credit card you have. Each issuer provides a preset list of cryptocurrencies for you to choose from.
The most common crypto rewards are offered in popular cryptocurrencies like Bitcoin, Ethereum, Litecoin, and Dogecoin. Similarly, the amount you receive as a reward for your purchases will depend on the rewards rate, determined by the issuer, and the live market value of your chosen cryptocurrency. Like regular rewards credit cards, some crypto credit cards earn a flat rate on purchases and offer bonus rewards when you purchase products from certain categories.
For example, let’s say you have a crypto credit card that offers 3 percent rewards in crypto when you purchase fuel, and you get the rewards in Dogecoins. When you buy fuel worth $100 using your card, the issuer will reward you with Dogecoin worth $3, based on the market value of Dogecoin at the time when the transaction is posted.
Of course, you will have to set up your crypto account or wallet with the credit card account before you can set up your crypto credit card to function smoothly. However, the great thing about crypto credit cards is that you do not have to pay expensive crypto exchange fees for the crypto rewards you earn.
This way, you get to invest in your favorite crypto fee-free, with free money you get as a reward. It is unlikely for you to find a more valuable crypto investment solution.
Crypto credit cards can be a great and passive way to start investing in crypto, especially if you do not care much about your current credit card rewards. Most people don’t even consider these rewards in their budget planning. You must remember that a crypto credit card is like any other credit card, and you should use it responsibly.