Cryptocurrency has grown exponentially in a relatively short period of time. What began as a niche interest with potential has bloomed into a multi-billion-dollar industry that has millions of investors checking the news on a daily basis.
A newer part of that landscape is the crypto debit card. Though it may seem like an exciting chance to connect your digital wallet to your physical one, there are a few critical things that you should know before you seek out a crypto debit card of your own.
What is a Crypto Card?
Crypto cards are as they sound: a bridge between your cryptocurrency holdings and traditional finance. While the only way used to be selling your crypto holdings for traditional fiat currency, the middleman has now been cut out.
Crypto cards link directly to your holdings, allowing you to pay for transactions in the real world. It is bridging the gap between those merchants that don’t take cryptocurrency and the world of digital assets. It also provides greater autonomy over your digital holdings, spending where you see fit rather than having to go through the entire conversion process manually. If anything, it’s a convenient middleman.
The Key Difference Between a Crypto Debit Card and Crypto Credit Card
It is important to know that a crypto debit card is much different from a crypto credit card. The former is tied directly to your exchange holdings: you swipe your card and it connects to your exchange holdings, either removing them directly or instantly selling and transferring to cover the cost of the purchase.
A crypto credit card isn’t the same thing. It is actually a traditional fiat currency card, just with cryptocurrency as the reward. So, instead of cash back or frequent flyer miles, you would receive a percentage back in the supported crypto token.
Transaction and Exchange Fees
As is the case with traditional finance, there are fees involved with crypto debit cards. The confusing thing is that you will hear most issuers say that there are no transaction fees involved, which can be a bit misleading. The real fees are in exchange fees and the spread.
The spread is the difference between the current market price of a token and the price when the issuer initiates the transaction. This could change a bit here and there, and those fees can add up depending on how many times you use the card. There isn’t really a way to avoid it, just be aware before getting involved with a crypto card.
What Tokens are Supported?
One of the biggest issues that comes with getting a crypto debit card is knowing which tokens are supported. Though there are so many tokens out there that have significant investment capital involved, not as many are supported by card issuers.
Before you sign up for a crypto debit card, make sure that you are aware of which tokens are supported. Bitcoin, Ethereum, and stablecoins are traditionally supported, but it really all comes down to the issuer. Check the fine print before you make your decision in order to save yourself from potential availability issues.
Creating a Bridge Between Traditional and Digital Finance
You don’t have to be the most involved crypto investor in order to get a crypto debit card of your own. Knowing about the fees, which tokens are supported, and the differences between crypto credit card rewards and debit cards is a great place to start. Soon, you’ll be able to bridge your crypto holdings with your fiat holdings flawlessly.
