Trendy crypto credit cards

July 21, Upgrade Bitcoin Rewards Card became the first generally available US credit card to focus on cryptocurrency rewards. It offers unlimited 1.5% cash back (paid in bitcoin) on all purchases with no annual fee.

There are a few notable fine print: Cardholders must keep their bitcoin rewards for at least 90 days. If and when they choose to sell their bitcoin, they will be charged a 1.5% transaction fee. These rewards cannot be transferred to another crypto wallet. And the card is not available in Hawaii, Indiana, Iowa, Louisiana, Nebraska, Nevada, New Hampshire, North Carolina, Washington, West Virginia, Wisconsin or the District of Columbia.

The competition

BlockFi and Gemini have opened waiting lists for consumer credit cards that pay cryptocurrency rewards. And Brex now allows its corporate credit card holders to redeem their reward points for bitcoin and Ethereum, as well as pre-existing options like cash back, travel, and gift cards ( crypto redemptions not worth as much, yet).

the BlockFi Bitcoin Rewards Credit Card will pay 1.5% cash back on each US dollar transaction, which it will then convert to bitcoin.

Some other key aspects of the BlockFi credit card include:

  • 5% bitcoin rewards in the first 90 days of a new cardholder
  • An additional 2% APY on top of BlockFi’s current stable APY for those holding GUSD, PAX or USD coins on a BlockFi Interest Account
  • A 0.25% discount on cardholder crypto transaction volume (paid in bitcoin), up to $ 500 in bitcoin each month (excluding transactions from stablecoin to stablecoin)

the Gemini Credit Card will offer cardholders up to 3% cash back (paid in bitcoin or other cryptocurrency) on food and beverage purchases, 2% on groceries, and 1% on other purchases. it will come with World Mastercard advantages like a free subscription to ShopRunner and discounts from Lyft, DoorDash and others.

None of these cards charge an annual fee. And customers will spend US dollars, not cryptocurrency.

What about general purpose cash back cards?

While you can get 2% cash back on all purchases without the annual fee cards such as the Wells Fargo Active Payment Card, the PayPal Cashback Mastercard and the Citi Double Cash Card (this one technically gives 1% cash back when you make a purchase and another percent when you pay for it), you will need to go some extra steps and pay extra fees to convert that money into crypto yourself.

If you are interested in crypto rewards, the SoFi Credit Card might be the best option of all. It gives 2% cash back on all purchases when you redeem them to an eligible SoFi account. One of these possibilities is to buy crypto through a SoFi Invest account (other options include saving, paying off debt, and investing in stocks and bonds). Using your rewards to buy crypto avoids the usual crypto commissions and transaction fees of SoFi and guarantees a better cashback rate than other crypto rewards cards (except maybe Gemini, if you are using this card intensively for catering purchases).

At the end of the line

Investing in cryptocurrencies is not for the faint of heart. Don’t invest more than you can afford to lose. The price of bitcoin tripled from December 2020 to April 2021, but then lost half of its value over the next three months. Where it goes from here is a guess.

I could see the crypto credit card rewards as a game with house money. Just be prepared for a wild ride. Most people are probably better suited for more traditional cash back or travel redemptions.

A question about credit cards? Email me at [email protected] and I would be happy to help.

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About Michael Terry

Michael Terry

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