Cryptocurrency adoption has been on the rise over the past two years. People have shown great interest in buying things using crypto cards. Crypto cards come as crypto debit and credit cards. These cards work almost similar to conventional cards but with few exceptions, making them unique. In this blog, we will compare crypto debit cards and conventional debit cards. Also, which one aligns better with your financial needs.
- 1. What is a crypto debit card?
- 2. What is a conventional debit card?
- 3. How does a crypto debit card work?
- 4. How does a conventional debit card work?
- 5. What are the fees associated with crypto debit cards?
- 6. What are the fees associated with a typical debit card?
- 7. What are rewards/perks associated with crypto debit cards?
- 8. What are rewards/perks associated with traditional debit cards?
- 9. Which card aligns with your financial needs?
What is a crypto debit card?
A crypto debit card is just like a conventional debit card that allows cardholders to complete day-to-day transactions using cryptocurrencies such as BTC, ETH, and other altcoins. These cards are supported by Visa and Mastercard so that they can be used at millions of outlets worldwide. Crypto debit cards have some similarities with traditional debit or credit cards, while these cards aren’t connected to any bank account, it’s the cardholder’s digital wallet where money is stored. In the case of cryptocurrency debit card transactions, a simple touch on a regular terminal is enough to withdraw the desired amount from the digital wallet, already converted into the equivalent local currency.
What is a conventional debit card?
A conventional debit card is also a payment card that can be used in place of cash (fiat currency) to pay for everyday purchases. These cards are also issued by Visa, Mastercard, and Discover and can be used across millions of locations.
How does a crypto debit card work?
For using a crypto debit card, first, the cardholder needs to top-up his card with the cryptocurrency of his choice, using a website or an app. It means he will need a bank account to transfer money to and from the card. Once the account is linked, he will transfer the fiat currency, U.S dollars, from a bank account to a crypto debit card corresponding exchange to load crypto onto the card.
It is important to wisely choose which crypto to be topped-up, considering transaction fees and the coin’s volatility.
Crypto debit card is ready to use!
Suppose a cardholder wants to pay for a cappuccino using a crypto debit card. He will hand over the card to the retailer, who will swipe the card. The card provider will convert the digital currency into fiat currency and pay the shop in local fiat currency such as USD, EUR, or GBP.
One can also choose to top-up the crypto debit card using stablecoins. With stablecoins, volatility cannot be an issue and will help the cardholder stick to a regular budget.
How does a conventional debit card work?
For a conventional debit card, one must have a bank account. After opening the account, the bank will give you a debit card. The cardholder can use it to make purchases. The money is directly paid from the linked account. The cardholder must have cash in his account.
What are the fees associated with crypto debit cards?
The following are fees associated with crypto debit cards.
- Card issuance fee: No card issuance fee.
- Monthly or annual fee: No monthly or annual fee.
- ATM Withdrawal fee: Mostly, crypto cards do not charge ATM withdrawal fees. There is only a 1%-2% fee if the withdrawal is higher than the daily limit.
- Foreign transaction fee: Mostly, there is no foreign exchange fee. In contrast, some cards charge a small fee.
- Crypto liquidation fee: Zero to 2.49%
What are the fees associated with a typical debit card?
The following are fees associated with a typical debit card.
- Out-of-network ATM fee: Usually $3 fee if a cardholder uses an ATM, not in his bank’s network.
- Foreign transaction fee: 1% to 3%
- Monthly or annual fee: Small to high monthly or yearly maintenance fee.
- Over-draft fee: Around $35 if the cardholder spends more than he has in his account.
What are rewards/perks associated with crypto debit cards?
Perks and rewards are the main reason for crypto cards’ popularity. The following are perks or rewards associated with crypto debit cards.
- Cashback: Cardholders can earn up to 8% cashback in crypto on purchases.
- Perks: Cardholders can enjoy 100% free Netflix, Amazon Prime, and Spotify subscriptions, discounts on Expedia and Airbnb. They can also enjoy access to an airport lounge.
Rewards depend on which crypto debit card cardholder is using.
What are rewards/perks associated with traditional debit cards?
Traditional debit cards do not offer rewards. While only a few banks provide cashback rewards on certain debit cards.
Which card aligns with your financial needs?
There are millions of people using conventional debit cards globally. The number of crypto debit card users is also rapidly increasing. After comparing both types of cards, the crypto debit card appears to be more economical and rewarding and can better align with your financial needs. However, you must do your research to find more and choose wisely.