Croissants, when perfectly baked, are delicious. They’re cheap too. If you ever find yourself in Europe, whether it’s a café in Paris or a pâtisserie in Italy, eating a tasty croissant is a rite of passage that few should miss.
But if you’re stuck in a hotel room in a foreign country and you’re strapped for cash, this doesn’t mean that you’ve got to miss out on your croissant adventure. Sure, you can pay for your single croissant with your credit card, but where’s the fun in that?
And what if you weren’t approved for a credit card due to your less-than-ideal credit? Fear not, because crypto debit cards offer a solution to all of your traditional financial woes. (Well, most of them anyway.)
So, what is a crypto debit card, and why would you use one over a traditional debit card to buy not just croissants, but anything in general?
What is a cryptocurrency debit card?
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So here's a commonly heard challenge from people who are new to crypto: "When will you be able to take your crypto assets and digital currency out into real money?"
This is where you might respond, "Well, you don't. The plan is to hold it long enough until you're able to pay for everyday things with crypto."
And there's a good chance they'll raise a brow before they burst out in laughter. And you know what? That's fair. It feels far off in the distant future when you can walk into a store and pay for a croissant in Paris with crypto, right?
Well, not quite.
Sure, retailers have been dragging their heels, feet, and shoes to roll out cryptocurrency payment options. A common reason includes the wild rollercoaster price volatility of a nascent technology. (And who can blame them? If you pay for a croissant with $1 in ETH, and then ETH prices collapse by 50%, it could cause cash flow problems for the store. Not to mention taxes.)
Here's another major challenge for mainstream crypto adoption. People just aren't willing to risk money for things they don't understand. And that's fair too. People like to stick to what they know, after all. According to behavioral economist Daniel Kahneman, people are risk-averse.
Specifically, people are less willing to take on risks, and more willing to keep what they already have.
And we're not even diving into other issues, such as unclear regulations and potential tax implications. Incorporating new payment processors into an already-running business is also a cumbersome exercise. After all, business owners may be thinking, “Why fix something that ain’t broke?” The same route of thinking might make them reluctant to introduce unnecessary risks for both their own business and their existing clientele.
So how does the industry get around this, and still promote mass adoption?
Why, with crypto debit cards, of course.
How do crypto debit cards work?
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Here's exactly how your crypto debit card works:
Step 1. Pick the crypto debit card company that aligns best with your needs
Before ordering your card, you’ll have to undergo Know Your Customer (KYC) verification. Once you sign up successfully, you should receive your card in the mail within a few days’ time.
Step 2. Top up your card
You can top up your card using your crypto wallet or your favorite crypto app. Alternatively, the issuer of your crypto debit card should have a digital wallet, or you’ll most likely be able to purchase crypto directly via their website.
Step 3. Hand the Croissant Master your crypto debit card
That's it! It really is that simple. You're now ready to consume that croissant.
Sure, you may not have heard of most crypto debit card companies. But you're definitely familiar with legacy credit card companies like Visa and Mastercard. Partnering up with these companies is how the cryptocurrency market is partially able to bring easy access and utility to everyday users.
That's why, even after you've topped up your card with your favorite crypto, it doesn't matter whether you're shopping online or in person. Without any fiat, you'll still be able to enjoy a seamless shopping experience. This is possible thanks to crypto debit cards converting your digital currency into fiat instantaneously. And did I mention you don't have to incur any additional costs?
So how do these crypto card companies make their money? In more ways than one.
For some of them, like Crypto.com, simply requiring users to hold their native token in order to make purchases increases its liquidity and market capitalization. For others, like Revolut, they charge a modest flat fee of 1.5% for currency exchanges.
Others, like Cryptopay, charge customers a 1% fee for loading/unloading, as well as for the one-time purchase of their plastic prepaid cards. This card issuer also charges customers 3% in foreign exchange fees.
Yet, compared to traditional card issuers, crypto card holders are better off. Here’s yet another benefit you should be aware of:
Some debit card companies offer two separate cards—a virtual card for online purchases, and a physical card for in-person purchases—to make the shopping experience even smoother for customers.
So where does this mean you can use it? Pretty much anywhere. And the cost of that is...
Benefits of using a crypto debit card over traditional debit cards
What direct benefits might you enjoy should you own a crypto debit card?
- Traveling anywhere and buying pretty much anything, irrespective of location? Most crypto debit cards offer this option, since your crypto is automatically converted into local fiat.
- Insanely low fees? Compared to traditional debit cards, crypto cards don't charge you for foreign exchange fees. They don't even charge for transaction fees, will sometimes waive ATM withdrawal fees, and turn a blind eye to a monthly or yearly subscription fee as long as you hold the minimum required amount in your account.
- Handsome crypto-back rewards? Instead of cashbacks, you get crypto-backs for eligible purchases. Yes, I know it sounds weird, but it's exactly like it sounds. Spend money, get crypto. Delicious.
- Earning interest on dormant digital assets? Sure, HODLing coins like Bitcoin can be fun. But what if you could earn serious interest simply for holding it?
- Unhindered spending limits? Don't you love it when you go shopping for expensive items, and once you've made your purchase decision, ATM withdrawals won't work because you're past your daily limit? Isn't that fun? (It's like playing tag with your bank!)
Well, with crypto debit cards, you won't need to put up with banks trying to control how you spend your money. You're free to spend your own money as you please, without having the bank hold your hand.
- No bank account required? Why do you need a bank account when you can be your own bank? Be your own custodian. And if you've got bad credit, no problem. The digital assets you already own are what you can spend.
- Rewards for holding the card's native token? Many crypto debit cards also have their own token, like Wirex (WXT) and Crypto.com (CRO). Simply by holding it as an asset in your crypto wallet might qualify you for additional bonuses. Such perks may include accruing a greater percentage of rewards for every crypto asset you hold.
However, keep in mind that for Wirex and Crypto, you actually can’t make any purchases unless you hold these native tokens. (Purchases are made using these tokens, making things cost-effective and convenient for both the card holder and the card issuer.)
- And of course, how about additional perks associated with traditional credit cards? Like vacations? Airport lounge access? Or discounts? All the other cool stuff that comes with traditional credit cards? If this is the reason holding you back from ditching your traditional cards, then you can ditch this reason too. Crypto debit cards offer all the perks offered by the cards already in your wallet, and more.
Them Taxes Tho!
Don't forget: If you're living in a country such as the US, the IRS may want to have a word with you. That's because, every time you use your card, you might be triggering a taxable event. This depends on factors like whether you've held onto the coin until you've earned some gains. It's wild. I know.
Which crypto debit card is best?
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Not all crypto debit cards are created equal. As with all debit cards, crypto and otherwise, what is "best" depends on 1. your needs and on 2. your location. Sometimes, a card may not be available in your location, since the crypto company may be issuing the card in partnership with a bank or financial institution that isn’t accepting clients from your area.
We cover an assortment of the most popular cards below, as well as their pros and cons. It's a wide selection, so enjoy the buffet, and choose wisely.
It’s hard to argue that pretty much every card is great for Americans. But Bitpay might be the one card that is actually “the best card” for U.S. users. First, it’s available only to Americans because you need to submit your social security number before signing up.
Second, Americans incur no conversion fees from inside their country, irrespective of which state they’re in. And unlike most debit cards, this one’s issued on the Mastercard network, not Visa’s. Travel abroad, though, and keep in mind you’ll be stuck with a 3% conversion fee.
If you’re a Bitcoin maximalist, this card was made for you. Sure, some people might consider getting crypto-backs only in Bitcoin to be a hindrance. But to Bitcoin maxis, this is music to their ears.
BlockFi offers 1.5% Bitcoin back for all purchases. They also offer $30 in Bitcoin for every successful referral.
The Coinbase card is a popular choice for Americans. It’s the main crypto exchange that’s available to U.S. users, and if you’re based in the United States, ordering the card is free of charge. It’s also issued on the Visa network, so you can use it literally anywhere in the world where Visa is supported.
But if you live in Europe, to get your hands on the exact same card Americans have, you’ve got to cough up nearly €5 to receive it in the mail. Users are also required to hold a Coinbase account, but that isn’t even the main drawback.
That trophy is reserved for the crypto liquidation fee, which is the fee you pay to convert your crypto into fiat. Every time you use your Coinbase card to make a purchase with your crypto, Coinbase collects 2.49%.
This is my favorite card. Crypto.com supports three different tiers and 90 cryptocurrencies. The company is also very fee-friendly; it doesn’t charge anything for issuing the cards or a fee for maintaining your account.
The only “drawback”? You’ve got to hold Crypto.com’s official CRO token to qualify, and the more CRO tokens you hold, the higher your tier. Some reviewers have criticized this aspect of membership, but it also seems rational. It makes sense for the company to offer greater rewards if you choose to offer greater support to the company. Sounds fair, no?
The card preferred by European users, this crypto card is issued on the Mastercard network. Nexo not only offers crypto-back rewards, it also rewards users with high-interest yields for holding certain cryptocurrencies in their account, with yields going up as high as 12%!
Nexo also doesn’t charge for withdrawals, and doesn’t require a minimum deposit. Nexo, a crypto-lending platform, is also known for its high levels of security, so if this is a feature that’s important for you, Nexo’s crypto debit card is worth a look.
Wirex is great if you don’t like transaction fees. Unlike Coinbase, Wirex doesn’t even charge for fiat exchange services. They also have an extremely generous daily outgoing transaction limit of $50,000. The only real drawback with Wirex is that if you’re based in Europe, the company collects a commission every time you top up your card.
How do you get your hands on a crypto debit card? It's simple. If it's available in your location, all you have to do is apply.
Will everyone use crypto debit cards in the future?
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So what's my take on this? Will crypto debit cards become ubiquitous in the future? Let me put it this way:
If you shun crypto, it's like shunning the Internet. You can get with the times, or you can get left behind. This is true for consumers as it is for financial institutions and other companies choosing to drag their heels.
Do not get left behind.
Maybe you're funny about risk tolerance. Maybe the slightest price movement triggers a major bowel movement. But if you're curious about crypto, and you don't have the stomach for it, then order a crypto debit card right away.
With your crypto debit card, you can enjoy risk-free accumulation with crypto cashbacks. This way, you gain exposure to crypto and hedge against fiat inflation, without having to worry about incurring any losses. It's a great incentivization scheme for those who want to dip their toes into crypto-infested waters, but aren't ready to head out for a swim.
Now go get that croissant!
Valerio is a blockchain writer at HODL Content. He lives in Chiang Mai with his partner and dog, and spends his free time building mining rigs and studying Rust.