How Do Crypto Credit Cards Work?

The growth of crypto over the last decade has attracted significant attention from legacy institutions and alternative capital giants.

A man staring at a human hands taking out a crypto credit card out of a wallet.

The growth of crypto over the last decade has attracted significant attention from legacy institutions and alternative capital giants. This has led to extraordinary innovation in the space, and one of those innovations is the concept of a crypto credit card. 

Crypto credit cards are quite similar to regular credit cards. The only difference is that crypto credit cards allow you to spend in fiat and earn rewards in crypto. Traditional credit cards often give cashback or rewards through a point system that can be used for several things. On the other hand, crypto credit cards provide these rewards in cryptocurrencies.

How Do You Use a Crypto Credit Card?

Crypto credit cards are the same as any other credit card because users can use them to pay for goods and services in fiat. Like normal credit cards, users are entitled to some benefits for using the card to pay for services. These benefits are converted to crypto and then added to the user’s digital wallet. 


Many crypto credit cards are co-branded. This means that a bank issues the card, which a brand then markets. This brand could be an exchange, or it could even be a digital wallet company. 

Different crypto credit cards have different policies concerning benefits and crypto, much like different banks have different credit card policies. So if you choose a brand to get a crypto card from, you’ll have to understand what the card provider is offering. One would also need to understand what the market looks like and the best deal you can get. 

Like most credit cards, crypto credit cards usually offer anything from 1.5-3% back on all eligible purchases by users. Crypto card issuers have different policies surrounding borrowing to users. Some, like the Visa card, require potential users to stake tokens before getting a card. Others, like Binance, provide cashback rewards based on a user’s BNB monthly average balance. 


Those who want to obtain a crypto credit card need to understand a few things about them first. 

What to Consider When Purchasing a Crypto Credit Card

1. Volatility

Volatility is the first thing anyone investing in any crypto asset needs to understand and consider. Cryptocurrencies are incredibly volatile, meaning that the rewards users get may not have a stable value. Users who aren’t comfortable with that sort of volatility should not consider getting a crypto credit card. 

2. Taxes

People who live in the USA or states where cryptocurrency is considered property may incur taxes on every transaction with their crypto credit cards. If the state considers these transactions a taxable event, those who use these cards could experience deductions at every point. While the rewards aren’t taxed, the government may ask them to be recorded on individual tax records.

3. Offerings

There are tens of viable cryptos worldwide, and crypto credit card companies are unlikely to offer rewards for all of them. So users who want a crypto credit card need to find out what crypto it offers rewards in. This should help them choose whether they want to go with one card or another. 

4. Limitations

Different countries have different regulations and limitations around how cryptocurrencies work. For instance, residents of the United States have to deal with the reality that other states also have different regulations. Before purchasing a crypto credit card, it’s important to check whether they are legal in the location they are used in. 

Once all these have been considered, the following questions center around the reputation of the crypto company issuing the card. Users should ask whether the issuer is widely trusted in the crypto ecosystem and whether there are other hidden fees in the Service Level Agreement (SLA) fine print.

Crypto Credit Cards vs. Crypto Debit Cards

Crypto debit cards are also quite similar to regular debit cards. The only difference between both cards is that the cash on crypto debit cards is stored in crypto and only converted to fiat at the point of payment. Hence, crypto debit cards can be used for expenses anywhere. However, like debit cards, they have to be continually topped up and don’t operate a credit system. 

Crypto debit cards have seen increased use over the last two years. For one, more than a hundred million vendors in the Visa network now accept payments from crypto-linked cards. Customers made about $2.5 billion in payments through crypto-linked cards in the first quarter of the 2022 fiscal year. Visa says that the volume of payments already accounts for over 70% of all crypto-linked card payments in the previous year. 

Should You Obtain a Crypto Credit Card?

Getting a crypto credit card entirely depends on what they are to be used for. For example, people who travel and want cash back on those trips may prefer a regular credit card. Regular credit cards often provide users with travel points that can be used to get free flights. This is a benefit that users would miss out on using a crypto credit card. 

However, investors who understand how crypto works and would like to do some passive investing on the side would find value in a crypto credit card. They could invest as quickly as they like and would be able to sensibly manage risk as well. It’s also an excellent option for crypto newbies who want to invest in certain coins. It’s a safe and intelligent way to get introduced to the crypto ecosystem since they would be investing with money they could afford to lose. 

Ultimately, choosing whether to get a crypto credit card or a regular one depends on the user’s interests, spending habits, and where they would like to invest their disposable income.

How to Apply for a Crypto Credit Card

The process for applying for a crypto credit card is almost the same as the process of applying for a regular credit card. 

Users first have to choose which brand of crypto credit card they want. Then they contact the company, fill out a form, and wait for the issuer to conduct a pull of the potential user’s credit history. Once the issuer conducts their due diligence and knows the applicant’s credit history, they decide to either grant the credit card or not. 

Like most credit card companies, crypto credit card issuers require good to excellent credit ratings to consider an applicant eligible. Users who have poor credit should probably not apply since they are unlikely to obtain a card.

Users are also advised to do their due diligence before applying for crypto credit cards. Like regular credit card companies, these issuers could also have hidden fees in the fine print of their terms of service. That’s why it’s imperative to understand the service the issuer is providing and what conditions the user is supposed to satisfy in return. 

On the Flipside

  • One big problem with crypto credit cards is that the rigidity of the rewards system means one cannot convert rewards to USD.
  • Crypto credit cards rarely provide sign-on bonuses, while regular credit cards regularly provide such bonuses. 
  • Crypto credit cards have extraordinary waitlists, which is hardly a thing with regular credit cards. 

Why You Should Care

Crypto credit cards are another way crypto is providing alternative means to save. If utilized correctly, they can be exciting investment opportunities They could also be an interesting way for people to save and preserve their wealth in crypto. However, just like every other thing in crypto, it’s essential to use them with discretion. 

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Victor Fabusola

Victor Fabusola is a Blockchain & Crypto Content Writer. He excels in crafting long-form educational guides, opinion pieces, and reviews in niches such as DeFi, NFTs, and Web 3.0. Outside of his work at DailyCoin, he loves conscious hip-hop and classical music and engaging in intellectually stimulating conversations with his friends.