There’s no shortage of credit card rewards programs available and a wide variety of perks to choose from, including cash back, airline miles and retail rewards. In recent years, cryptocurrency reward cards have filled a niche for those interested in earning digital currency from their card swipes.
With cryptocurrency rewards cards, users can earn bitcoin, ethereum and other digital currencies from their purchases.
If you believe a cryptocurrency rewards credit card is the right fit for you, below is a detailed list of the top three options.
What Are Crypto Rewards?
Cryptocurrency rewards credit cards allow users to earn bitcoin or other digital currencies from everyday purchases, offering cryptocurrency as a reward in lieu of traditional cash back bonuses. Cryptocurrency rewards cards can be used to directly earn cryptocurrency through purchases or swap other rewards into cryptocurrency. Such cards can be attractive to cryptocurrency enthusiasts and newbies looking for a low-risk option to dip their toes in the digital currency waters.
“Crypto rewards cards can offer a unique twist on your typical rewards card and can help you build up your cryptocurrency wallet while you make everyday purchases,” says Carter Seuthe, formerly of Credit Summit, a firm that offered advice for consumers on building credit and getting out of debt.
As with all credit cards, users should refrain from overspending and pay off balances each month if possible to avoid interest charges. Users of cryptocurrency cards should be cognizant that digital currencies are volatile assets, and the dollar value of holdings can shift quickly upward or downward.
“Cryptocurrency values can change dramatically in a very short amount of time, so you may find that your rewards become worth next to nothing very soon after you earn them,” says Nicholas Creel, associate professor of business law at Georgia College & State University. “Of course, that is a sword that cuts both ways in that a cryptocurrency’s value could spike after you earn it.”
This volatility is the most significant potential issue with cryptocurrency rewards cards, Creel says, but there are benefits. In some cases, these cards allow users to access cryptocurrency without going through a third-party exchange, he says. That means users may be less susceptible to leaked financial data or hacks and less vulnerable to a potential exchange failure.
What to Look For in a Crypto Rewards Card
When searching for any credit card, familiarize yourself with key credit card terms such as annual percentage rate, annual fees, balance transfers and potential penalties. It is important to shop around and compare offers since interest rates and annual fees can significantly impact the time and costs to pay off a credit card balance.
With cryptocurrency rewards cards, Seuthe says it’s important to be aware of the types of cryptocurrency the cards offer, the percentage of rewards and if there are any limits on the rewards.
Rewards — cryptocurrency or otherwise — should be just one factor in determining the best credit card for you. When comparing cryptocurrency rewards, look for rewards in the cryptocurrencies you are interested in, such as bitcoin or ethereum, and the percentage of rewards you’ll earn with each purchase. Make sure the percentages are comparable to other rewards cards, because you always have the option to accept regular cash back and purchase digital assets with those rewards.
Pros and Cons of Crypto Rewards
Pros
— You can easily earn cryptocurrency from purchases without having to buy and sell on an exchange.
— Rewards could appreciate in value if cryptocurrency prices rise.
— Crypto credit cards can carry a lower APR than other cards in some cases.
Cons
— The volatility of cryptocurrency can reduce award values.
— It could complicate your taxes if cryptocurrencies are later sold for a profit.
— There are potential security risks if cryptocurrencies are held on an exchange.
[Read: Best Credit Cards.]
Best Card for Rewards: Gemini Credit Card
The Gemini Credit Card is the best crypto credit card for rewards because it offers users the flexibility to earn rewards in bitcoin, ethereum and dozens of other digital assets available on the Gemini cryptocurrency exchange platform. Crypto rewards are deposited immediately into users’ Gemini accounts at the time of purchase, and users can change the cryptocurrency reward type to spread the rewards across different assets.
Annual fee: None
Sign-up bonus: $200 in crypto when you spend $3,000 in your first 90 days
Rewards:
— 4% crypto back on gas, EV charging, transit, taxis and ride-hailing
— 3% crypto back on dining purchases
— 2% crypto back on grocery purchases
— 1% crypto back on all other purchases
[Read: Travel Credit Cards]
Best Card for Flexibility: Venmo Credit Card
The Venmo Credit Card is the best crypto credit card for those seeking flexibility since it provides users with the option to accept traditional cash back rewards or switch to cryptocurrency rewards with the press of a button. Card users can automatically purchase crypto, such as bitcoin, litecoin, bitcoin cash or ethereum with their cashback rewards at the end of each month with no transaction fees.
Annual fee: None
Sign-up bonus: None
Rewards:
— 3% cash back in your top spending category (Cardholders can choose from eight categories, including transportation, travel, dining and nightlife, groceries, entertainment, bills and utilities, health and beauty, and gas.)
— 2% back in your second top spending category
— 1% back on all other eligible purchases and on person-to-person transactions on Venmo
[Read: High Limit Credit Cards]
Best Card for Long-term Crypto Holders: Nexo Card
The Nexo Card is the best crypto credit card for long-term cryptocurrency holders because it allows users to use their cryptocurrency holdings as collateral. The Nexo Card is linked to Nexo’s crypto-backed credit lines, and no minimum payments are required. The Nexo Card also carries lower interest rates than typical credit cards.
Annual fee: None
Sign-up bonus: None
Rewards:
— Up to 2% in crypto cash back on purchases or 0.5% in bitcoin
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The Best Crypto Credit Cards originally appeared on usnews.com
