New Delhi: Credit cards, which are considered the most convenient method of payment, could be a thing of the past in years to come.
Today, several companies have started accepting cryptocurrencies or digital currencies as a method of payment, as digital currency is gradually becoming a valuable asset in the wallets of several investors.
Just like their conventional counterparts, the crypto credit card also rewards users, but in cryptocurrencies. The process is a little more complicated for users, however.
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What is a crypto credit card?
A crypto credit card allows the user to spend cryptocurrency, and it also rewards cryptocurrencies. In the world of crypto, there are also debit cards.
Unlike crypto debit cards, a crypto credit card lets you borrow from the card issuer and pay back later. Not much different from how traditional credit cards work. The main difference is that you also pay back in crypto. Rewards, if any, will also come in cryptocurrencies such as Bitcoin, Ethereum, etc.
Different crypto credit cards reward users differently. A Gemini credit card rewards up to 3% cashback in Bitcoin. It is instantly deposited into the consumer’s Gemini account.
BlockFi credit card subscribers can earn 1.5% cashback in rewards in over 10 types of cryptocurrencies, including Bitcoin and Ethereum.
In the case of SoFi credit cards, reward points can be redeemed for Bitcoin or Ethereum.
The Venmo credit card, on the other hand, allows users to purchase Bitcoin, Ethereum, Litecoin, or Bitcoin Cash with the cashback earned from purchases.
With Brex Business Card, users can spend reward points on Bitcoin or Ethereum.
About user spending
An important point to keep in mind is that crypto cards are very similar to conventional credit cards and failure or delay in repayment will incur high interest and late fees. These crypto cards will also have some weight on your credit score. Annual fees are also applicable like traditional credit cards. Regardless of the rewards, crypto credit, if not repaid on time, can cost you dearly. So, understanding the terms and conditions of crypto credit cards is crucial for your finances.