Crypto-currency – the virtual money
Cryptocurrencies, sometimes called crypto-currencies or crypto, are any form of currency that exists digitally or virtually and uses cryptocurrencies to protect transactions. Cryptocurrencies do not have a central issue or regulatory agency; instead, they use a distributed system to record transactions and issue new units. Cryptocurrency is a bank independent digital payment system for transaction verification. This peer-to-peer system allows anyone to send and receive payments anywhere. Rather than carrying around and exchanging physical money in the real world, cryptocurrency payments only exist as digital entries in online databases that describe a particular transaction. When transferring crypto funds, the transaction is recorded on a public ledger.
Cryptocurrencies are stored in digital wallets. Cryptocurrency is, as the name says because it uses encryption to verify transactions. This means that it will store and transfer Cryptocurrency data between wallets and public ledgers using advanced encryption. The aim of encrypting the cryptocurrency is to provide security and safety. The firstly known cryptocurrency was Bitcoin. It was created in 2009 and is the most famous crypto. There are a few more types of cryptocurrency such as Ethereum, Ripple, Litecoin. The best the interest in cryptocurrencies field is in exchange for profits, and observers might raise prices.
Bitcoin ATMs and currency value
A Bitcoin ATM is an internet-connected kiosk that allows you to purchase Bitcoin and other forms of cryptocurrencies. Cash, debit cards, and credit cards are accepted depending on the device and network. Bitcoin ATMs are quickly gaining popularity, with over 30,000 kiosks in the U.S. as of February 2022. Unlike bank ATMs, Bitcoin ATMs can only buy cryptocurrencies and distribute cash. Most Bitcoin ATMs limit the number of cryptocurrencies that can be purchased at one time. Bitcoin ATMs often charges a fee for their use and may not offer optimal prices for cryptocurrencies.
The value of Bitcoin in U.S. Dollars is at a much higher rate now than it was a decade ago. Currently, the value of a Bitcoin in USD is $43,599.50. Though this rate went down by 0.88% today and about 20% in the year 2022, there is no question that if you own even one Bitcoin, you can earn a fortune by exchanging into solid/physical cash by looking at the rate of cryptocurrency value increment because just the last year a Bitcoin’s value hit the highest value of $69,000 so far in the cryptocurrency history.
Crypto purchase with Credit cards
There are various ways to buy Bitcoin and other cryptocurrencies, including with a credit card. But not all cryptocurrencies can be acquired with a credit card, and not all exchanges support achieving cryptocurrency with one. Moreover, even on cryptocurrency exchanges that support purchasing with a credit card, the fees can make it quite exclusive.
Other than a payment the exchange charges for its service, it might charge an extra fee for using a credit card. For example, the exchange might charge you a percentage of the transaction amount to exchange dollars for Bitcoin or another cryptocurrency.
For example, Coinmama trades eight cryptocurrencies, including Bitcoin. Coinmama requires a minimum acquisition of $60 and charges a 5.9% transaction fee plus an additional £5 on credit card acquisitions. So, for every $100 you buy in cryptocurrency, if you buy with a credit card, you pay $10.90 and consent only $89.10. If you consider the acquisition as an investment, you will need to return 12% to return to the previous level.
Another thing to remember is that cryptocurrencies are currencies, so many banks and credit card issuers treat them the same as cash. So, your card may treat a cryptocurrency acquisition the same as it would a cash advance from an ATM. That means you may experience extra fees, and you’re expected to be charged interest initially on the date of the withdrawal.
There are also considerations like,
- Foreign exchange fee – If the exchange is dependent on outside the U.S., you might experience a foreign exchange fee if your credit card charges one. A distinctive price is 3%.
- Scam – If you are not careful when choosing a money changer you can trust, your personal information, including credit card numbers, can be stolen. If you are in debt to buy cryptocurrency using your
- Debt credit card – you are taking a high risk. You pay huge interest on unstable investments.
- Credit Use – When you make bulk purchases with cryptocurrency, you use up all of your available credit, negatively affecting your credit history.
Credit cards with Bitcoin rewards
One of the latest developments at the juncture of cryptocurrency and credit cards is a credit card that offers users rewards in cryptocurrency. On the shortcoming of this, because the dividends are paid in bitcoins, you do have the capability to get in on any price appreciation of Bitcoin. Still, you’ll also be focused on more unpredictability (and potential loss) than with a traditional cash back rewards card. However, more bitcoin credit cards will be publicized in the near future. In addition, there are quite a few credit cards that offer Bitcoins as a reward to the users.
Visa Signature Card BlockFi Rewards
The BlockFi Visa credit card provides potential applicants with the opportunity to verify that the card can be accepted through soft credit verification before they formally apply. This is unique among cryptocurrency card issuers. The
The BlockFi Visa credit card contains 3.5 checks and can spend up to $100 in crypto during the first three months. The card’s annual fee is $0. All purchases are made in cryptocurrency with a base rate of 1.5 CK. You can earn 2% back in crypto on every purchase over $50,000 annual spend. Your annual expenditure resets at the start of each card anniversary year.
Although it doesn’t earn cryptocurrency solely, the Brex cards now include reclamations for Bitcoin (BTC) and Ethereum (ETH) and other options together with miles, gift cards, cash or travel, making it the first business card to contain crypto as a reclamation choice.
Brex makes suggestions for two different business cards, each intended at another kind of company. One version, the Brex Card paid monthly, allows well-funded companies to contact capital quickly. In contrast, the Brex Card delivered daily has no minimum balance condition and permits a company to charge up to 80% of their limit. Both cards can be exchanged for profits for Bitcoin or Ethereum in the same way that they can be exchanged for miles, gift cards, cash or travel.
Gemini Credit Card
Gemini credit cards such as Visa BlockFi allow you to receive rewards in the form of Bitcoin and other cryptocurrencies. Cardholders make purchases using U.S. dollars but can be rewarded with cryptocurrency. Information about the new Gemini card is vague, but we know it will cost up to $3 when you buy it. There are also no fees for cryptocurrency exchanges and can be used in all 50 U.S. states.
Crypto.com Visa Card
The Crypto.com Rewards Visa card is a pay upfront debit card that contains five different “flavours,” each with its own exclusive set of perks and benefits. These tier levels are resolute by how much you “stake,” or essentially a loan, the crypto card issuing institution. The lowest level involves no staking, but the rewards are minimal. The highest level involves a 5,000,000 CRO, the digital token of Crypto.com, staking condition. 5,000,000 CRO rewards are correspondent to USD 400,000, making the most elevated level out of reach for all but a minimal group of Crypto investors.
Crypto.com Rewards Visa’s mid-level cards seem to be the most logical as the staking requirements are less egregious, yet the benefits are still alluring. Incentives include free Amazon Prime, Spotify, Netflix, airport lounge access and more.
SoFi Credit Card
If you have an active SoFi investment account, the SoFi Credit Card permits you to exchange your points for cryptocurrency. You’ll earn 2% cashback on all qualified acquisitions and can exchange it directly into one of 20 different types of crypto accessible through SoFi Invest.
Tomo Credit Card
With the Tomo Card, customers who have accumulated at least $10 worth of rewards can choose to redeem their earnings for any of the three major cryptocurrencies as Bitcoin, Ethereum and Litecoin, with more options to become available down the line, said Kristy Kim, CEO and founder of Tomo Credit in an interview with Forbes Advisor. In addition, you can repay your earnings 28 days after the previous month’s statement is paid in full.
- Bitcoin Rewards Visa Card Renewal
The Bitcoin Rewards Visa Upgrade provides an unlimited 1.5 CK Bitcoins for payment. Bitcoins can be used as an investment or sold at any time to exchange value for loan statements. Your Bitcoins are held by NYDIG, a technology and financial services company dedicated to Bitcoin. If you choose to sell Bitcoin, you will be charged a 1.5% transaction fee. So, $10 worth of bitcoins will earn you $9.85 in sales, which you can use as a statement of credit. When you first make bitcoins with your card, you have a 90-day holding period before you can sell them.
“Cryptocurrency Cash Back” choice can be selected. This way, you can use your regular cashback in your Venmo account to buy any cryptocurrency you want. You can keep this cryptocurrency, buy more or sell it each time you want. You can purchase Bitcoin, Ethereum, Litecoin, or Bitcoin Cash as these marks. Venmo does not charge a purchase transaction fee when buying cryptocurrencies in this way but does charge a fee each time an asset is bought or sold.
Advice for using this combo
Undoubtedly, cryptocurrencies are going nowhere, but do they have a future? Depending on what you think about this issue, you can resolve whether a credit card with cryptocurrency rewards is right for you. Seasoned cryptocurrency lending enthusiasts will find that cryptocurrencies provide a great way to add credit cards to their wallets and help them grow their digital assets. However, due to the comparatively low risk of cryptocurrency rewarded credit cards, they may finally appeal to those who want to take their first steps into the cryptocurrency world.
Cryptocurrencies and credit cards are increasingly overlapping. There are already 20,000 Bitcoin ATMs to buy Bitcoin and other cryptocurrencies, with more added each month. You can also buy cryptocurrency with a credit card on many exchanges, though you’ll want to watch out for high fees and other charges.
So basically, as usual, this is up to you. Though how much of a higher rate does a Bitcoin has when converted to physical money, you can decide upon all the disadvantages and advantages offered by the credit cards with Bitcoin rewards before making your decision.
These are purely the opinions of the author based on observations of financial platforms and a study of public reviews and ratings on the relationship between cryptocurrency and credit cards. Excerpts from various sources have been used to clarify the facts of this article. A glossary of all sources can be found at the end of the article. This article is for educational purposes only and is not financial advice.