How the Bitcoin Credit Card Works
Since the beginning of time, we have accepted money as our medium of exchange. And today, Bitcoin has taken charge. It also made it possible for anyone to send money without the use of any third parties. In fact, the total value of all existing cryptocurrencies exceeds $2 trillion.
Different financial service organisations are now using this currency to attract new consumers. If you have Bitcoin and need to make regular transactions with it, then you should get a Bitcoin credit card. It gives you control of your own wallet and private keys that allow access to your funds.
By now you may be wondering how buying a cup of coffee with Bitcoin works. If you want to keep your fingers on the Bitcoin pulse, then a Bitcoin credit card is a great way to go. But what is it all about? Here’s everything you need to know about Bitcoin credit cards and how they work.
What is a Bitcoin Credit Card?
A Bitcoin credit card works like a traditional rewards credit card. It rewards credit card transactions with Bitcoin instead of mileage or cash back. You can place a higher priority on receiving your rewards in Bitcoin rather than cash.
But to reap the benefits of using one, you should have an excellent credit score. According to any credit bureau agency, the highest you can get is an 850 credit score. This is known as the perfect credit score. With such a score, you can have better financial options, including loans and mortgages.
So how do you get an 850 credit score?
Getting the perfect credit score is hard, but not impossible. All you have to do is make a habit of following the best practices below:
- Make timely payments on your loans, credit cards, and the likes
- Pay your debts weekly so that you can avoid having balances
- Consider increasing your credit limit
- Keep your old accounts open
- Apply for new credit cards only when you need it
It also helps to monitor your credit report regularly. This will help you identify any discrepancies in your report. Should there be any, get the help of credit repair services to get your credit fixed.
They work with creditors and credit bureaus to improve your credit score by cleaning up your credit records. Top-rated credit repair companies can help you improve your credit score, especially if you have bad credit.
If you’re wondering how much credit repair costs, no worries. Some affordable credit repair services are available for you. These cheap credit repair services can also help you achieve the perfect credit score possible.
How Does the Bitcoin Credit Card Work?
Bitcoin credit cards function in the same way as any other credit card on the market. The more you spend on the card, the more rewards you get. But, in this case, you will receive bitcoin in exchange for your purchases. It’s worth noting that each card rewards you bitcoin differently.
To know more about how bitcoin credit cards work, here are some examples.
1. BlockFi Rewards Visa Signature Credit Card
BlockFi launched the world’s first Bitcoin credit card last 2021. After signing up, you will receive BlockFi’s Rewards Points instead of cryptocurrency. If you have purchases above $30,000 yearly, you can get 2% back in cryptocurrency. This resets every year on the card’s anniversary date.
BlockFi will turn the points into bitcoin as soon as you deposit them and your account is in good standing.
To get the card, you need to have an excellent credit score. If you’re finding it hard to improve your credit rating, hire credit pros to help you in this aspect.
With this card, you can earn extra rewards from your bitcoin holdings and cryptocurrency exchanges. You can get 0.25 percent cash back on all qualified trades and up to $500 in cryptocurrency every month. You can also get $30 in cryptocurrency for recommending the card to each person.
The card works on the Visa network and has no yearly or international transaction fees.
2. Gemini Credit Card
Gemini is a popular cryptocurrency exchange that also released a crypto credit card. This bitcoin credit card enters the market with the most flexible offer. You can earn rewards in a wide range of cryptocurrencies. You can, then, move them off the Gemini platform into your own cryptocurrency wallet.
Their rewards are proven to be competitive with those of others who offer cryptocurrency credit cards. The best thing is that there is no annual or foreign transaction fee!
To get this card, you need to qualify for the following:
- You’re a registered Gemini user
- A resident in the US
- Have a 670 to 850 credit score
- Have a driver’s license or passport
Once you’re approved, you can pick from three-card colours: black, rose, or silver. This customisation is not available on many credit cards. They will also give you a virtual card, so you can start using it right away while you wait for your real card to arrive. You can use your Gemini Credit Card in any place that accepts Mastercard.
3. Upgrade Bitcoin Rewards Card
The Upgrade Bitcoin Rewards Credit Card is one of several cards issued by Sutton Bank. It’s like a credit card and a loan in one. That means you can make purchases and then pay off your debt in equal monthly instalments. You can do this over a defined period of time with a fixed interest rate.
But that’s not all: when you make monthly payments, the card gives you 1.5% back in bitcoin. This makes it another product in a growing trend of credit cards that provide cryptocurrency incentives.
This is perfect if you haven’t decided on whether you should get into cryptocurrency or not. The Upgrade Bitcoin Rewards Card allows you to do so without risking your own money.
4. Venmo Credit Card
Many people use Venmo to send and receive money from their friends and family. But, if you look at the app’s other features, you’ll see that the mobile payment service has a lot more to offer. One such thing is the Venmo Credit Card.
You can participate in a personalised rewards program. By doing so, you can earn cash back on where you spend the most, with no annual fee. That means you will get 3% cashback on the top eligible spending category, 2% on the next, and 1% on others. These spending categories can include bills, dining, groceries, gas, beauty and health, and transportation.
You can use the rewards you get in different ways using the app, such as:
- Paying your credit card bill
- Completing Venmo requests
- Paying authorised merchants
- Converting it to real money and transferring it to your bank account
- Buying cryptocurrency
By applying for one, you will see that your Venmo app adds your Venmo credit card as a payment option. Additionally, you can use it in places where Visa credit cards are accepted. The QR code on your credit card also allows other people to “Venmo” you or request a payment on the spot.
Should You Get a Bitcoin Credit Card?
You should only apply for a Bitcoin credit card if it will reward your spending patterns. If you’re interested in cryptocurrencies, earning bitcoin incentives can be beneficial.
But make sure you understand the benefits of each card against the costs. Here are some thoughts to consider:
- How much is the reward rate?
- Will you be paying an annual fee?
- Are there any other charges?
- Are there other benefits or privileges that come with the card?
- Is it possible to get a better deal with another card?
By choosing the best rewards credit cards on the market, you can get better benefits and incentives. Remember that you can buy Bitcoin using your cashback benefits from a regular credit card. It makes more sense to choose a credit card that offers a larger cashback rate in exchange for a lower annual fee.
While cryptocurrency rewards appear appealing, they are also volatile. It’s much like a stock market investment. There’s no telling what the value of the coins will be after a few months or so. Be sure you make the right decision when it comes to applying for bitcoin credit cards.
The Bitcoin credit card has the potential to change the way we use cryptocurrencies. It will be possible to pay for goods and services using bitcoins. This means that you won’t have to convert your bitcoins into fiat currency before buying. The more widespread the acceptance of cryptocurrency, the more useful this credit card will become.
If you want to test the waters of Bitcoin and cryptocurrency, it can be a good way to dip your toes in. There are plenty of options available right now, so you’re not limited to only one choice here. So go ahead and give Bitcoin credit cards a try. You never know what might happen.