People call them bitcoin credit cards, but it’s more accurate to call them bitcoin debit cards. You load up one of these cards with your bitcoin (or other cryptocurrency), then spend it like a traditional credit or debit card.
Usually these cards have integrations with VISA or Mastercard, so you can use them anywhere you use traditional credit cards – but you’re spending bitcoin, not cash.
These cards play a necessary role in the evolution toward a new financial system, but are they a good deal for consumers? Let’s take a look at three of the most popular cards, and show you what to avoid.
|Card||Card Issue||ATM Fee||Monthly Fee||Card Replacement||International Conversion Fee||Inactivity Fee||Cashback||Located|
|BitPay||10||2.5||0||10||0.03||$5/month after 90 days||N/A||Atlanta|
|Coinbase Card||About $5||Free for small amounts||0||About $5||0.03||N/A||N/A||San Francisco|
|Wirex||0||About $2.50/transaction||About $1.50/mo||0||Unclear “FX fees”||0||Up to 1.5% back in BTC||London|
|Nexo||Not a bitcoin debit card.||0.02||Switzerland|
|Revolut||Not a bitcoin debit card.||London|
|MCO Visa||Not a bitcoin debit card.||Free up to $200 per month; otherwise 2%||Up to 1% back in MCO tokens|
|Bluebird (Amex)||0||2.5 (some are free)||0||0||0||0||0||New York City|
BitPay is a payments company located in Atlanta, Georgia that allows companies to receive payments in bitcoin. Founded in 2011, the company created one of the first bitcoin prepaid VISA cards back in 2016, and has since switched over to Mastercard.
The BitPay Prepaid Mastercard allows you to load up the card with a few different cryptocurrencies (BTC, ETH, XRP, BCH, and a number of others), then spend it anywhere in the world that accepts Mastercard.
You’ll pay $10 for BitPay to print each new card, $2.50 to make ATM withdrawals, and a $5/month monthly fee if you haven’t made any purchases in 90 days. But making purchases in bitcoin is essentially free, as long as you plan on using it regularly within the U.S. (international currency conversion costs an extra 3%).
San Francisco-based Coinbase is emerging as one of the giants of the new financial system, and their Coinbase VISA card is available to customers in the U.S. and most of the EU. The Coinbase user interface is excellent, so it has become the default “bitcoin bank” for many users new to blockchain investing. Conveniently, their debit card draws down directly from your Coinbase wallet, like a bank account.
The Coinbase Card is also powered by VISA, and supports BTC, ETH, LTC, BCH, and XRP, as well as a few smaller cryptocurrencies like BAT and XLM. You can then spend your cryptocurrency wherever VISA is accepted, drawing down from your Coinbase Wallet.
The cost to issue a new card is around $5.00, with no monthly fee and no inactivity fee. Small ATM withdrawals are free. You’ll pay an extra 3% if you’re using it internationally.
Based in London, Wirex was the first to offer a VISA payment card to let you spend digital currency. Today the company specializes in currency conversion – both international and digital – so you can load up one VISA card and easily use it in multiple countries, across multiple cryptocurrencies.
If you read the Wirex Card homepage, it sounds like you can use it pretty much anywhere for free. If you look at the Wirex fees page, it tells a different story. There’s a 1.20 EUR monthly fee, ATM fees are around 2.00 EUR per transaction, and international currency conversions have an unspecified “FX fee.”
On the other hand, there’s no cost to issue the card, there’s no inactivity fee, and there’s 0.5% “CryptoBack”, which is like cashback, but they pay you an extra 0.5% in bitcoin for all in-store purchases. (A $100 purchase, in other words, would get you $0.50 in bitcoin – more if you hold their Wirex token.)
Read the Fine Print
There are a number of other “bitcoin cards” on the market that aren’t really debit cards, so read the fine print. For example:
The Nexo Card is frequently included on the list, as it has Mastercard integration. But Nexo is a loan provider, not a “bitcoin bank.” This is not a bitcoin debit card, but a way to leverage your existing assets to put even more money at risk. Their homepage reads, “The only crypto card that lets you spend the value of your crypto without having to sell it.” (Remember there’s no such thing as a free lunch.)
Revolut is making waves as a next-generation financial services company to help you better manage your money. While the app is truly groundbreaking, and also allows you to buy and sell bitcoin and Ethereum, its card is not a “bitcoin debit card,” but rather a traditional card tied into your Revolut account.
The MCO VISA Card looks slick, with different “tiers” like the ones offered by American Express, and packed with features like reimbursement of monthly Amazon Prime, Netflix, and Spotify subscriptions. But it’s not a bitcoin debit card, just a way to get you to buy more MCO tokens, with the cards offered as a benefit.
Why Crypto Cards Are Still User-Confusing
To thrive, the “crypto card” industry needs to become more user-friendly. Today, it’s still user-confusing.
It’s not just the complicated fee structure and lack of consistency between cards. It’s that the “bridge” between digital and traditional payment systems (e.g., VISA and crypto) is not fully built out. Here are a few of the problems that need to be solved:
- Country-specific rules. Some cards are only available in some countries, and all cards have conversion fees if you want to use them internationally. These international fees are confusing, and can vary by country.
Solution: Bitcoin debit card apps and websites should auto-detect your country and just give you clear language on where it can be used and what the fees will be to use it internationally.
- Cryptocurrency delays. Once you deposit digital assets on a card, it can take a few hours (or even a few days) to show up, given the slow settlement times of some blockchains. This can be worrying for consumers who want to see their balance show up in the account instantly.
Solution: Bitcoin debit card apps should include clear communication on the transfer process, and a constantly-updated “tracking number” (like FedEx tracking) that shows what’s happening.
- Cryptocurrency volatility. This is the big one. If consumers don’t understand that bitcoin can swing wildly in price from day to day, they won’t understand why their balance keeps changing. Some “bitcoin debit card” providers will actually convert you into a native token, which means now you have volatility and a different token.
Solution: Bitcoin debit cards should have a easy three-swipe “tutorial” that walks you through how digital assets work, making it clear they do not hold their value like fiat currency.
Who Uses Bitcoin Debit Cards?
There are a few likely consumers. First, people who bought a lot of bitcoin in the early days and want to cash out some of that profit, perhaps without paying taxes (note: in the United States, buying stuff with your bitcoin gains is still a taxable event).
The second group is people who want to somehow move funds for illegal or sketchy purchases. Google reports that people search terms like “bitcoin debit card no verification” or “anonymous bitcoin debit card,” which is likely people trying to get around the ID checks required by reputable providers.
The third group, though, is legitimate and growing. This is the group that is evolving to the new global financial system, unconstrained by national boundaries and local currencies. They may purchase bitcoin, convert it into stablecoins, then “draw down” from their balance as they need it for local spending.
If you want to spend bitcoin in everyday purchases, here’s a simple table showing two options for a consumer that spends $100/month on a card. This is what you might pay with a bitcoin debit card vs. a traditional debit card.
|Bitcoin Debit Card||Bitcoin into Traditional Debit Card|
|Process||Load up card with BTC, then spend||Convert BTC to USD, load up card, then spend|
|Card issue fee||$10||0|
|Monthly fee||0 (unless inactive for 90 days), then $5/month||0|
|Conversion fee||0||$48.00 (assumes 4% to convert BTC to USD)|
The bitcoin debit card has fewer fees, but higher volatility. This means you may get a great deal (the price of bitcoin goes up, and you have more purchasing power), or you may get a terrible deal (the price of bitcoin goes down, draining your account).
The best deal of all is to convert your bitcoin into a stablecoin (which holds its value against traditional currency), then hold that coin on the debit card until it’s time to spend. If you’re trying to spend bitcoin, this gives you the best of both worlds: lower fees and high stability. As of this writing, I am not able to find any company that allows you to do this. (Some debit cards let you deposit stablecoins but then they convert it to a higher-volatility coin.)
Today, then, the cheapest alternative for those who want to “spend” their blockchain investments is to hold them in a stablecoin (such as Tether, USDC, or SAI), which will protect them against volatility. When you want to spend, load those stablecoins onto a debit card (and don’t forget to pay taxes on the gain).
This is not terribly convenient, but at least we have legitimate ways to pay using crypto into the existing card system. And over time, as user interfaces and consumer communication improves, the system will only get better.
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