Cryptocurrency is a new thing that many have accepted as a form of investment. They can now be used as currency and, this is something really good. We now have a variety of options when it comes to paying for services with cryptocurrencies. We can do this effectively using credit and debit cards.
Sometime back, the gateways for crypto had a lot of limitations. Users were limited to using Bitcoin ATMs or wire transfers. However, things have changed now and, financial giants like Mater and Visa Card began to adopt cryptocurrencies such as Bitcoin and others.
What is a crypto debit/credit card?
Crypto debit and credit cards are not complicated at all. They function the same way as normal payment cards. The only difference comes in because you are now using cryptocurrencies to pay for products and services.
One thing to note is that one does not pay directly with Ethereum, Bitcoin, or any other crypto asset. When you are using these crypto cards, your digital asset is converted into the local fiat currency and then sent to the merchant.
These crypto credit cards are supported by the help of Master and VisaCard who are two of the biggest global financial networks. Upon receiving a license from these two financial giants, the crypto company will go ahead and issue a crypto card to you that is supported and accepted at any store that accepts MasterCard or VisaCard payments.
Who are these cards for
If you have understood the digital currency world well and realized the currencies available have limitations, then this is a perfect credit card for you. You will be more versatile and not limited to euros, yen, dollars, etc. You will have the luxury of transacting from a global platform without the limitation of currencies.
Crypto debit and credit cards usually make your asset significantly more portable as you will be carrying it with you at all times. It means that if you want to have coffee at Starbuck or have dinner at a nice restaurant, you can use your crypto card to pay for this if they accept MasterCard & VisaCard payments.
Sometime back, it was impossible to use cryptocurrencies in stores because transactions could take up to half an hour to be complete. But right now with Vista-based crypto payment cards, you do not have this problem anymore.
How does a crypto card work?
Crypto cards are unique in their business model and the way that you store and spend digital assets. Some of them may not grant you any rewards, others may give you limits for monthly drawings, and they’re also others that may result in you losing your custodian privileges.
When it comes to custody, Platforms are categorized into two. Some can utilize your wallet and those that require you to create a dedicated wallet.
First of all, you will need to move your assets to the platform’s wallet or in a completely new wallet. In some instances, you can link the credit card with an existing wallet. By so doing, you will remain the individual operator and owner of your digital assets.
Once the crypto funds are connected with the card, you can go ahead and start making payments. As earlier stated, all cryptocurrencies get converted into fiat upon using the card. Some other platforms may need you to change the crypto into their currency.
Since all cards are licensed by either MasterCard or VisaCard, they do have the same regulations and restrictions just like regular credit cards. For instance, you have monthly withdrawal limits, maximum daily payments, and maximum balances.
There are platforms that are known to implement a loyalty system where there are specified features that are only accessed by a certain group of users. Cashback is one of the most frequent reward features in this context. They may even have tiers through which one can get to enjoy better card limits. These can only be unlocked, by staking cryptocurrencies.