If you’re new to the world of cryptocurrency, you might be confused by what exactly crypto credit cards are and how they work. Do they really use real cryptocurrency? Are they just as safe as using regular credit cards? We’ll explain everything you need to know about these new payment options, including how they work and how to choose one for yourself
Things to Know Before Applying for a Cryptocurrency Credit Card
Cryptocurrency credit cards make converting your crypto holdings into traditional currencies easy. Before applying for a SoFi, you should know what you’re getting into. Cryptocurrency credit cards work much like a regular credit card does; you load your account with money by transferring crypto from a wallet or an exchange onto it. Then, you can use your balance to make purchases in stores and online—or withdraw cash at ATMs.
Are Crypto Credit Cards Just As Safe As Using Regular Credit Cards?
Cryptocurrency cards are just as safe as traditional debit cards. And according to experts at SoFi, you won’t be charged these astronomical fees when you use them abroad. But, while they do not charge foreign transaction fees, they may still make money off of interchange. Banks pay this fee when one issues a debit or credit card.
Types of Card Holders
Three types of credit card holders (holders, issuers, and acquirers) make up a crypto credit card system.
Cryptocurrency Price Volatility
Another major advantage of cryptocurrencies; they’re far more volatile than fiat currencies. Some of them have experienced cases of -50% drops in price, while others have seen +1000% gains. The marriage between crypto and credit is especially convenient for those who don’t want to worry about converting altcoins into USD or EUR before making a purchase. Altcoins are harder to exchange for fiat than mainstream cryptocurrencies.
Limitations and Drawbacks
When it comes to crypto credit cards, there’s a lot of potential for things to go wrong. Some cards work with only certain cryptocurrencies; some have very high fees. This can leave users confused about what to do next.
Best Rates Offered by Card Issuers
If you want to be able to spend your digital money as you see fit, there is no better option than a crypto credit card. Because institutions developed these cards, especially for cryptocurrency users, card issuers offer some of the best available rates on crypto conversions. There are even crypto credit cards that allow you to earn rewards points on every purchase. However, it is crucial to research before deciding which one is right for you. The rates vary widely from issuer to issuer.
So, now you know how to start investing in cryptocurrencies. If you are ready to take your first steps into a crypto investment, we recommend the SoFi credit card as a good place to start.
