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Understanding Crypto Debit and Credit Cards

Read 5 min
A bust of a person covered in currency
— Crypto cards are bridging the gap between fiat and crypto, but they do so in different ways.

— A crypto credit card lets you spend your fiat money and rewards you in cryptocurrency. 

— Crypto debit cards offer a way for consumers to pay using crypto they own in a wallet or account. 

Let’s dive into the difference between crypto credit cards and crypto debit cards – simplifying the space so you can get involved!

Crypto cards are one of the hottest topics in blockchain, linking the worlds of crypto and fiat currencies. But with so many different crypto cards, it can be hard to understand exactly what each one offers. 

But before we dive into crypto cards, let’s start with their origin.

The challenges of using crypto for everyday payments

Despite the meteoric rise of blockchain technology, and its obvious capacity to store and transfer value, crypto remains difficult to spend on a day-to-day basis. Only a very small minority of businesses accept direct crypto payments. Doing so requires crypto-specific payment infrastructure, plus, there are also tax and legal implications to consider. 

While crypto adoption is increasing, buying goods and services with crypto assets is still challenging. Typically, you will need to off-ramp to convert your crypto into fiat, a process that can take days. The same is true for on-ramping, otherwise known as swapping your fiat currencies for crypto. Simply put, using crypto for everyday payments in a shop or restaurant is still tricky.

As an answer to this problem, there are now several types of crypto cards. In short, these cards aim to bridge the gap between fiat and blockchain. But what are crypto cards exactly? Let’s explore the main varieties to understand their differences.

What is a Crypto Credit Card?

Crypto credit cards work the same way as traditional credit cards: they let you borrow a line of credit in fiat, such as dollars or euros, and you make repayments each month as normal.

The difference relates to your rewards. Like their TradFi counterparts, crypto credit cards give you rewards against your purchases in crypto. Yes, instead of travel points or cash-back, you receive crypto into a wallet you set up with the crypto credit card company.

The important point to note is that crypto credit cards are about helping you accumulate crypto, rather than helping you spend it. So if you’re looking primarily for a way of making purchases with your existing assets, this may not be the option for you.

Importantly, remember a crypto credit card is still a credit card. This means you’ll be subject to interest and late payment fees if your balance isn’t resolved at the end of the agreed period. If you’re debt averse, a crypto credit card is unlikely to be the best choice for you.

What is a Crypto Debit Card?

A crypto debit card converts your crypto into fiat instantly at the point of sale. Essentially it allows a crypto debit card to function as a regular debit card. Even when retailers don’t accept crypto payments directly, the crypto debit card converts your crypto into fiat to allow you to pay. This means more or less unlimited choices of how to spend your crypto.

And as mentioned, on and off-ramping takes time. Sometimes it can even take days! But crypto debit cards allow you to make this transition instantly. Yes, no more waiting, no more admin, just instant crypto spending power and more control for you.

Crypto Cards: Where Blockchain Meets Fiat

So there you have it: a basic overview of the crypto card ecosystem that will hopefully help you better comprehend your options. There are dozens of cards on the market, each with its specifics. But now you understand the basics, you’re in a great position to find the crypto card for you.

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