What is a crypto card and how does it work?

What is a crypto card?

A crypto card is much like a regular bank card, but instead of only using traditional money, you top it up with cryptocurrency, turn it into fiat, and use it for everyday spending. These cards are typically issued in partnership with major payment networks like Visa or Mastercard, which means you can use them almost anywhere in the world.

With some crypto cards, the cryptocurrency in your linked account is automatically converted into local currency at the moment of the transaction. This happens instantly, so from the merchant’s point of view, it looks just like a regular card payment. However, some cards require that you do the conversion beforehand.

Learn how to buy cryptocurrency

You can use a crypto card for everyday expenses such as coffee, groceries, travel bookings or online subscriptions.

Many crypto cards also support multiple cryptocurrencies for top-up. Some providers even allow you to switch between spending crypto or fiat currency from the same account, giving you more flexibility.

Another useful feature is that some crypto cards offer cashback-style rewards, but in cryptocurrency instead of cash or points. For example, a purchase at a retailer might earn you a small amount of CRO or another supported coin.

Crypto cards come in two main types: prepaid and credit.

What’s the difference between crypto prepaid and credit cards?

Crypto prepaid cards

Crypto prepaid cards work like any other prepaid cards; you choose which cryptocurrency to sell and the fiat proceeds are loaded onto your card for spending. They’re similar to topping up a gift card – you can only use what you’ve already added, which makes it easier to control spending. 

Crypto prepaid cards often support multiple cryptocurrencies, letting you choose which one to use at top-up stage. They don’t involve borrowing and are easier to qualify for, but generally come with fewer perks. These cards may suit someone who already holds crypto and wants a straightforward, low-risk way to spend it. 

Crypto credit cards

Crypto credit cards let you spend on credit up to a set limit, then repay later, typically in fiat currency. Instead of earning traditional points or cash back, many offer rewards in cryptocurrency. 

Using this type of card can be a way to accumulate crypto gradually through everyday purchases. However, they typically require a credit check and may have stricter eligibility requirements, with availability limited to certain regions. A crypto credit card may be better for those comfortable using credit who want to earn crypto rewards without buying coins directly.

How do crypto cards work?

Here’s the simple process:

1. Load funds (prepaid only)
   For prepaid cards, you deposit cryptocurrency (or sometimes fiat) into your account with the provider. This balance is what you’ll spend from, similar to topping up a gift card.
   
2. Make a purchase
   Use your card online or in physical stores anywhere Visa or Mastercard is accepted. The checkout experience is identical to a traditional bank card.
   
3. Conversion

• With prepaid cards, your loaded crypto is automatically converted into local currency at the current exchange rate when you top up or spend (depending on which card you use).
• With credit cards, the issuer processes your transaction in fiat but tracks it for crypto rewards.
  

4. Settlement
   The merchant receives payment in local currency, just as with any regular card. For prepaid cards, the equivalent value is deducted from your balance. For credit cards, the purchase amount is added to your statement balance.
   
5. Rewards (credit + some prepaid)
   Crypto credit cards return a percentage of your purchase in cryptocurrency (e.g., CRO or other supported coins). Some prepaid cards also offer crypto rewards, though usually at lower rates or with fewer extras.
   
6. Repayment (credit only)
   If you’re using a credit card, you repay your balance later in fiat currency, just like with any traditional credit card.

How to get a crypto card

1. Choose a platform
   Use a trusted online crypto provider that offers both prepaid and credit card options. Look for strong security measures, transparent fees and any rewards programs that match your spending habits.
   
2. Sign up and verify your identity
   Create an account and complete the required identity verification process, which usually involves providing a government-issued ID and a selfie or other proof of identity. This step is important for security and regulatory compliance. Credit cards normally also require a credit check
   
3. Fund your account (prepaid only)
   If you’re applying for a prepaid card, you’ll need to load cryptocurrency or fiat before spending. Credit cards don’t require preloading since you borrow against a credit line.
   
4. Receive your card
   Many providers issue a virtual card immediately so you can start spending online right away. A physical card is typically mailed to you for use in-store or at ATMs.
   
5. Start spending
   Prepaid cards convert your loaded crypto into local currency at top-up or purchase stage, while credit cards track your spending and award crypto rewards. Either way, you can spend worldwide anywhere Visa or Mastercard is accepted.

Benefits of using a crypto card

• Spend crypto like cash: Use your cryptocurrency for everyday purchases. This works anywhere Visa or Mastercard is accepted, making it simple to pay in stores, online, or while traveling.
  
• Earn rewards: Many cards offer cashback-style rewards paid in cryptocurrency instead of points or cash. Rewards can help you gradually grow your crypto holdings through your regular spending.
  
• Travel perks: Some premium cards include free airport lounge access, travel insurance, or waived foreign transaction fees. These extras can make crypto cards a good fit for frequent travelers.
  
• Global acceptance: Because they are backed by major payment networks, crypto cards can be used in millions of locations worldwide. This makes them more versatile than trying to find merchants who directly accept cryptocurrency.
  
• Subscription rebates: Certain cards offer partial refunds on popular subscription services like Spotify, Netflix or Amazon Prime. These perks can add extra value for everyday users beyond basic spending.

Downsides and risks of crypto cards

• Volatility: Cryptocurrency prices can change rapidly, sometimes within minutes. The value of your holdings may be higher or lower at the time of spending than when you loaded your card.
  
• Fees: Some cards charge transaction, conversion, or annual fees that can eat into rewards or convenience. Fees may also vary depending on whether you are spending domestically or internationally.
  
• Tax considerations: In many countries, using crypto to make a purchase is treated as a taxable event. You may need to keep records of each transaction for reporting purposes, which can be time-consuming.
  
• Merchant acceptance limits: While the payment network (Visa or Mastercard) is widely accepted, some merchants or payment processors choose to block transactions from crypto-related cards. This can occasionally limit where you can use your card.

Is a crypto card right for you?

A crypto card can be useful for people who already hold cryptocurrency and want a simple way to use it for everyday spending. It may also appeal to those who like the idea of earning rewards in cryptocurrency instead of traditional points or miles.

On the other hand, someone who rarely uses crypto or prefers to hold it purely as a long-term investment might not see much benefit in having a crypto card. For these users, the potential rewards or convenience features may not outweigh the effort of setting one up.

Read more about picking the right rewards card and the best crypto prepaid cards in the US.

Note: This information is for general educational purposes only and shouldn’t be taken as financial advice. Always do your own research and consider your personal circumstances before making any decisions about financial products.

FAQs about crypto cards

What’s the difference between a crypto prepaid and credit card?

A prepaid card is topped up with crypto or fiat and can only spend what’s loaded. A credit card lets you borrow up to a set limit and earn rewards in cryptocurrency. Crypto.com focuses on credit cards, which deliver stronger perks and rewards.

How do crypto card transactions work?
When you make a purchase, some cards convert your crypto to local currency instantly and the merchant receives payment in that currency. Others require that you convert your crypto to fiat first (i.e., before spending). 

Which crypto card should I get?
It depends on your location, spending habits and whether you prefer prepaid or credit. The Crypto.com Visa Credit Card is a popular option with competitive rewards.

How do I apply for a crypto card?
Sign up with a provider, complete identity verification, and fund your account. You may receive a virtual card immediately.

Are crypto cards safe to use?
Yes, if issued by reputable providers. They include standard card security features such as encryption and fraud monitoring.

Are crypto card rewards taxable?
In many regions, yes. Check your local tax laws or consult a tax professional.

Is a crypto card worth it?
If you spend crypto regularly or want to earn rewards in cryptocurrency, it can be. If you mainly hold crypto as an investment, you might not benefit as much.

Ready to try a crypto card?

1. Download the Crypto.com App
2. Explore the Crypto.com Visa Card options
3. Complete verification and fund your wallet
4. Start using your crypto for everyday purchases

Important information: This is informational content sponsored by Crypto.com and should not be considered as an investment recommendation or advice. Staking rewards, fee reduction, and other benefits referenced in this article may be subject to eligibility requirements, token holdings, and may change at the discretion of Crypto.com. The Crypto.com Visa Card is subject to credit approval.