Cryptocurrency Cards: A Complete Guide
Cryptocurrencies are becoming more and more popular nowadays, but there’s one issue many people are concerned about, and that is: How can I spend my coins?
If your knowledge about Bitcoin and other cryptocurrencies is solely based on the myths propagated by the media in the last couple of years – about how it was invented and used as the currency of the online black market and how everyone using it was a sort of cybercriminal, this article is going to prove you the exact opposite. Tons of businesses are accepting Bitcoin payments right now, and those who don’t will certainly take credit or debit cards. Today, we are looking at one of the most convenient inventions in the cryptocurrency niche – and that is cryptocurrency cards, which allow you to spend your Bitcoins or altcoins using a simple payment system everyone is familiar with.
Cryptocurrency cards are a rather recent invention, dating back no more than a couple of years. Before, if you wanted to have your crypto coins on your card, you would have to 1) use an exchange to purchase fiat money, and 2) transfer it to your bank account. You would be charged fees for both of these steps, and you’d also need quite a bit of time on your hands, as the exchange process and the transaction could take up to a week. Cryptocurrency cards reduce the process to one step – and that is exchanging the exact amount of crypto coins into fiat money the moment you make a purchase. No more fees from your bank or long waiting times – what’s not to love about it?
But how do cryptocurrency cards work? Who is issuing them, how can you trust them, and where can you use them?
For one, there are several companies that issue cryptocurrency cards. Some of the most trusted ones at this point are Cryptopay, TenX, Coinbase/Shift, BitPay, and Monaco, but there are a few hundred smaller companies that may or may not be worth your time. There’s no real way to make sure that the crypto card company is legit, other than doing rigorous research. And, just like any other business in the cryptocurrency niche, crypto card companies will usually make their websites and social media presence as impeccable as possible – but you should always revert to non-biased, third-party reviews before choosing a company.
The crypto card company will usually offer two options – either a physical plastic card or a virtual card. Now, you might be wondering why on Earth would you need a virtual card when you already have your crypto wallet, but think about all the online stores that will only take cards, and not crypto wallet payments. For that kind of payment, you don’t really need to hold the plastic card in your hand – you just need to introduce the name, card number, CVV code, and expiration date on the website. All that data makes up a ‘virtual card,’ that is usually cheaper and less of a hassle than a physical one. However, if you prefer to have the real plastic card in your actual wallet, you can also have it delivered to your door.
Whether you opt for a real or virtual card, they will be equivalent to the VISA or Mastercard you currently have in your wallet. That means you can use the crypto card anywhere where they take VISA or Mastercard – including your local grocery store, the gas station, and at thousands of online stores.
Let’s talk fees, as none of these crypto card issuers is doing it out of goodwill alone. The fee system is very similar to that of banks and standalone card issuing companies. When you create a new card, you’ll have to pay an initial fee depending on the type of card you want (real or virtual). If you want it shipped, some companies will charge a shipping fee as well. Then, you will have to agree to a monthly maintenance fee (usually a couple of dollars) – and here it’s important to opt for a company that charges a flat maintenance fee regardless of the amount you have on the card. You will also be charged domestic and international ATM fees, and sometimes transaction fees, which should be less than a couple of dollars as well.
Limits are another issue, especially if you’re an investor or someone planning to do more than just order pizza with their new crypto card. We won’t go too deep into the limit amounts, but it’s important to check that the company lets you withdraw as much as you need to, and as often as you need it. You might also check the top-up limits, both the daily and the lifetime ones. Lastly, look into the company’s online transaction limits (if any), as those can be a huge pain if you want to shop online using your crypto card. A rule of thumb here is that the fewer limits a company imposes, the better for you – both as a casual user and an investor.
Note that all of this information is, or should be, available on the issuing company’s website. If it isn’t, it might be a red flag that the company is not as transparent as they should be, so better stay away from them.
Lastly, what are the advantages of a cryptocurrency card? One of the most important ones is convenience – you can now use your coins to buy just about anything, even if they don’t take crypto wallet payments. When you buy something, only the amount you pay is converted into fiat currency, and the conversion happens on the spot, without the need to go through an exchange. It also cuts the amount of time it takes to exchange and transfer cryptocurrency using traditional methods. In conclusion to all above said, crypto cards are one of the best options for people who want to spend their coins instead of keeping them in a wallet, grace to the ‘universal pass’ that is that VISA or Mastercard logo.