Crypto-based lender BlockFi said a new rewards credit card offers bitcoin instead of cash back, points, or miles, making crypto rewards credit cards the new incentive-style payment option. The crypto rewards credit cards are so new that limited options were available in the market, although many of these cards are scheduled to release this 2021.
As cryptocurrencies gain popularity among investors and consumers, people find more alternatives to earn in the form of cryptocurrencies. Even major companies like Microsoft, Expedia, and Tesla are now accepting Bitcoin as a payment method.
These cards can be great for crypto enthusiasts varying from the crypto-curious person who wants to invest in the crypto market but doesn’t have the risk tolerance to jump into the market, to the ones who strongly believe in the digital currency.
Cryptocurrencies make people curious as to how they work and the blockchain technology behind them.
The cryptocurrency began in 2009.
Cryptocurrencies recently came into the market but their achievements have made a big impact on the market. Earlier forms of electronic money came into existence in the 1980s but it wasn’t until 2009, that a decentralized cryptocurrency, known as Bitcoin came into the market. Bitcoin is considered to be the pioneer of the movement and it was introduced by an anonymous individual or group of individuals using the name Satoshi Nakamoto.
When Bitcoin entered the market, its value was as low as $0.0008. But, as it gained popularity, Bitcoin was valued at $50,000 per coin in February 2021.
When Bitcoin started gaining popularity, various other cryptocurrencies emerged and it is estimated that there are over 4,000 cryptocurrencies as of early 2021.
The new crypto rewards credit cards
Crypto rewards credit cards are the newest incentive method in the field of digital currencies and so far these rewards look pretty enticing. They will be more beneficial if the cryptocurrencies continue to gain value at the rapid rate they are gaining today.
But can these crypto rewards credit cards help you save?
Although these cards sound confusing, they work just like the traditional rewards credit cards. Like every credit card available out there, the transfers are facilitated through the largest payment processing networks and that is Visa or MasterCard. You can save on these cards like any other rewards credit card.
Depending upon the processing network, crypto rewards credit cards can also be eligible with the benefits and card protections that are offered by Visa or MasterCard.
The other similarity between the crypto rewards credit cards and traditional credit cards is the usage for purchases. You will be issued a line of credit depending on your creditworthiness. Now, these funds can be utilized to make purchases in USD and you will have to pay back the amount that you spent along with paying charges if you fail to pay on time.
Each time you use your crypto rewards credit card, you will be eligible to earn rewards and every card offers different incentives.
There are various programs available that are worth considering. If you are intrigued by cryptocurrency, if you are someone who is new to the process and are worried about the volatility in the prices, then you can take part in these reward programs. When you swipe a credit or debit card that has a Bitcoin-powered rewards program, you will earn the cryptocurrency without spending your own money, just like your traditional credit or debit card programs.
Along with this, today’s most popular types of rewards are designed to be spent and not saved. Your traditional cashback loses value because of inflation and hotel and airline rewards regularly devalue due to changing policies.
However, in the case of cryptocurrency, the cardholders can easily hold their rewards and can redeem them when they see a rise in value.
Comparison between crypto rewards credit cards, crypto rewards debit, and prepaid debit cards
Despite running on similar processing networks and having the ability to earn rewards in the form of cryptocurrencies, the crypto rewards credit cards are quite different from prepaid debit options available.
The major difference between the two is that with crypto credit cards, the cardmembers can make purchases on credit through their credit line allotted by their respective financial institutions.
Crypto debit cards involve the user using their own funds.
Another drawback of the crypto prepaid debit cards when compared to crypto rewards credit cards is that they generally earn rewards in specified crypto that are offered by their banks which is usually significantly less valuable than some of the cryptos like Bitcoin and Ethereum.
The future of cryptocurrency rewards programs
People may be curious about cryptocurrencies as they may not offer enough stability in comparison to a traditional rewards program because cryptocurrencies are really volatile. For reward enthusiasts, who don’t want to face that kind of uncertainty, it is always better to opt for the traditional methods.
There is no doubt that cryptocurrencies are here to stay for a long time but they can’t win over the market soon because of their volatile nature. However, more established crypto enthusiasts may find that these crypto rewards credit cards are a great addition to their wallets and will help them grow these digital assets.