Digital Asset Service Providers like crypto exchanges around the world have partnered with popular payment providers like Visa Inc. (NYSE:V), Swipe, and MasterCard (NYSE: MA) to issue crypto credit cards and crypto debit cards to allow users to pay for services and products using their crypto holdings.
Crypto credit cards function just like traditional credit cards. When a crypto card holder purchases something using the card, the associated company’s payment processing network carries out the transaction providing users with greater ease and convenience while shopping.
Contrary to crypto debit cards, crypto credit cards allow cardmembers to make purchases on credit via the credit line allotted by the issuing institution and are responsible for paying back the balance. Crypto credit cards can be used as payment for online and offline shopping. Some crypto cards offer perks, providing rewards in cryptocurrencies for paying fiat money at stores.
Crypto credit cards incur annual fees and transaction fees and impact one’s credit score the same way as traditional credit cards.
Interesting crypto credit cards data
1. There are five major crypto credit card networks
The four major crypto credit card networks are Visa, Mastercard, Discover, and American Express Co. (NYSE: AXP).
Besides allowing transactions, card networks also determine where credit cards are accepted. Not every merchant accepts all networks, and you may notice different network logos at checkout. Mastercard and Visa were accepted at 10.7 million locations across the US while Amex and Discover are accepted at 10.6 million locations across the US at the end of 2019, according to a report by Nilson.
2. Crypto credit cards account for about 38% of crypto cards worldwide
Presently available crypto credit cards include BlockFi Rewards Visa Signature Credit Card, SoFi Credit Card, Upgrade Bitcoin Rewards Visa, Venmo Credit Card, and The Gemini Credit Card.
3. 5% of American adults have a credit card that gives spending rewards
5% of American adults, which is an estimated 13 million people, currently have a credit card that offers spending rewards. The rewards allow the cardholders to earn cryptocurrency through purchases or redeeming earned points.
4. Bitcoin remains the most widely accepted cryptocurrency for credit card transactions
Besides leading in market capitalization, Bitcoin is also the most accepted cryptocurrency for crypto credit card transactions. Almost all cryptocurrency credit cards allow BTC.
5. Cryptocurrency credit cards adoption is expected to increase by 40% annually
The adoption of cryptocurrency credit cards is expected to increase by 40% annually over the next five years.
6. The total value of transactions made using crypto credit cards exceeded $1 billion in 2021
In 2021, the total value of transactions made using cryptocurrency credit cards exceeded $1 billion. The number of crypto credit cards then was fewer compared to today.
In the first quarter of 2022, Visa customers made $2.5 billion in payments in crypto-linked cards.
7. As of 2021, more than 70% of cryptocurrency credit card users were male
According to a study done by Zippia, 16% of men around the world are involved with cryptocurrencies compared to 7% of women.
Just as they lead women in investing in cryptocurrencies, more men than women use cryptocurrency credit cards seeing that over 70% of cryptocurrency credit card users were male.
8. 80% of cryptocurrency credit card users have invested in multiple cryptocurrencies
Approximately 80% of cryptocurrency credit card users have invested in multiple cryptocurrencies.
Crypto credit cards are gaining popularity among frequent travellers, as they offer a convenient way to make international transactions without currency exchange fees.
Crypto credit cards rewards
9. Nexo card offers 2% in NEXO or up to 0.5% in BTC in spending rewards
Although mostly classified as a crypto debit card, the Nexo card offers credit line rates starting from 0% APR to 13.9% APR. Once a user enables the “Purchase with 0% APR” option from the Card Settings menu inside the Card tab, Nexo transfers just enough collateral to keep the LTV below 20% so that the cardholder can benefit from our 0% Dynamic Interest – provided they have enough assets in their account.
In addition, the Nexo card allows users to earn additional free crypto with every purchase. Users can choose to redeem their rewards in bitcoins or NEXO. Users get up to 0.5% in crypto rewards when earning in Bitcoin and 2% when earning in NEXO.
10. SoFi Credit Card offers 2% unlimited cash back on purchases
Cardholders of the SoFi card earn redeemable SoFi Rewards Points. When redeeming SoFi points for crypto, each point is worth 1 cent and cardholders can select from either Bitcoin (BTC) or Ethereum (ETH). Redemptions start at 500 SoFi points.
11. The BlockFi Rewards Visa Signature Credit Card offers 1.5% – 2% back in crypto
The BlockFi Rewards Visa Signature Card earns 0.25% back in crypto on all eligible trades, 1.5% back in crypto for every purchase, and 2% back in crypto after $30,000 of annual spending.
12. Upgrade Bitcoin Rewards Visa offers 1.5% back in Bitcoin on payments
Contrary to most cryptocurrency credit card rewards, Upgrade Bitcoin Rewards Visa offer 1.5% cash back in Bitcoin on all purchases when users pay them back instead of when they spend.
13. Venmo Credit Card offers between 1% and 3% cashback
14. The Gemini Credit Card offers between 1% and 3% depending on what a cardholder purchases
The Gemini Credit Card offers cardholders the ability to earn 3% back on dining on up to $6,000 in annual spending, 2% cash back on groceries, and 1% cash back on all other purchases. The rewards are paid out in Bitcoin, and Ethereum among other 60-plus cryptocurrencies.
Going by the above statistics, although cryptocurrency credit and debit cards are currently countable because of serious banking restrictions happening on crypto transactions, the number of crypto credit cards has increased over the years. However, the majority of digital asset service providers including popular cryptocurrency exchanges like Coinbase, Binance and Crypto.com only offer crypto debit cards rather than credit cards.
Generally, the demand for cryptocurrency credit cards among cryptocurrency users seems to be on the increase mainly because they allow users to use crypto on credit to make purchases and pay for services. The rewards system incentive also attracts crypto users to acquire crypto credit cards.