At a glance
- Most Bitcoin credit cards are free and do not require a monthly fee.
- There are two types of Bitcoin credit cards. One variant works like a conventional prepaid card, the other like a so-called wallet.
- The acceptance of Bitcoin credit cards is high. Many are accepted wherever Visa or Mastercard are accepted.
Bitcoin – a term not known to many people for a long time. Since the enormous revaluation in winter 2017 and the spectacular crash at the beginning of 2018, crypto currencies have been on everyone’s lips. Although the exchange rates stabilised again in the summer, the past few days have seen another significant setback. One big drawback: payments with crypto currencies are still rare or complicated. As an investment object that has been popular for some time, direct payment is only possible in very few places.
The solution is the Bitcoin credit card. It combines the advantages of a crypto currency with the high acceptance of credit cards. Because all providers rely on the two world market leaders Visa and Mastercard. We’ll show you what to look out for when choosing the right Bitcoin credit card.
Which models of Bitcoin credit cards are available?
There are two different models of Bitcoin credit cards. The simpler variant is the prepaid credit card. Here, the credit card can be loaded with Bitcoin and the amount is then available on the credit card in the desired currency. This is based on the exchange rate at the exact time of the recharge.
This means that you cannot access your crypto currency flexibly with this form of credit card, but only via the selected, loaded amount. On the other hand, you can freely determine when Bitcoin is converted into the desired currency and thus set the time to the most favourable exchange rate possible. It is therefore always clear how much crypto currency is loaded on the card. The modern alternative: a credit card that works like a wallet. The crypto currency is transferred directly to this credit card.
The conversion can be handled differently depending upon offerer, whereby two possibilities prevailed. With some providers, the conversion takes place at the exchange rate at the moment of purchase. So if you shop online at Amazon and use your credit card, the Euro price of the product will be converted at the current exchange rate. Other providers leave it to the cardholder to decide when to exchange the Bitcoins. You can also exchange a certain amount in advance and save it on the card. This can simply be done via an app.
A decision about which variant is the most sensible for you personally must be made individually and is certainly also due to the use. Both variants offer great advantages. If the exchange rate is converted immediately, then one always knows exactly, how much equivalent is on the map. Thus, this variant is much safer. The other variant is riskier, but more promising.
How do you load a Bitcoin credit card?
Almost all providers charge the Bitcoin credit card the same way. By registering with the respective provider, you gain access to the wallet. The Bitcoin credit can then be sent to these wallets. Now there are the two options mentioned above for how the conversion works.
First, there are providers such as Wirex, where the Bitcoin credit balance is immediately converted into euros at the current rate and the credit card is ultimately charged with euros. On the other hand, there are providers like Tenx who take a different approach. With these providers, the credit card is immediately filled with the crypto credit and only at the moment of purchase is the Bitcoin credit converted into the currency to be paid.
How to manage your Bitcoin credit card
All available maps are managed via apps. All this means that a smartphone with the appropriate app is required for full use of the Bitcoin credit card. This enables you to make full use of your Bitcoin credit card and also to receive the corresponding protection, for example by being notified when your credit card is used. As with the use of all banking apps, you should be careful about the security of your mobile phone and avoid public hotspots.
With a few providers such as Wirex, for example, you also have the option of editing everything on your computer. Ultimately, however, the operation is optimized for the app. On the one hand, each app contains a wallet to which the crypto currencies can be sent and on the other hand, the applications allow you to see at any time how much credit there is on the card.
The latter is especially interesting if you have chosen the variant in which the currency exchange only takes place upon payment. Because with this option you don’t know your exact fortune because of the current exchange rate fluctuations. Furthermore, the credit card offers the possibility to use this only in its basic function as a wallet.
Also various further settings can be made in the app. For example, the card can be temporarily or permanently blocked via the app. In addition, it is immediately displayed when the card is used. This offers you a high level of protection and alarm against and in the event of misuse. A few conventional credit cards also rely on this service via app or SMS. In countries such as the USA, this service is already standard for security reasons.
Advantages of a Bitcoin credit card
The acceptance of Bitcoin credit cards is high. Many Bitcoin credit cards are accepted wherever Visa or Mastercard are accepted. This compensates for one of the biggest shortcomings of crypto currencies. These can be used via the credit card in commerce. This makes it possible to pay with Bitcoin in various shops, restaurants and public transport as if you were spending conventional money.
Most Bitcoin credit cards are free. Some cost a small fixed amount per month, such as 1.20 euros. Many Bitcoin credit cards offer a cashback program. So you get a kind of bonus for using them. This cashback ranges from 0.5 to two percent with the various providers. A further advantage is the partially free cash disposal at classical cash dispensers.
The amounts available can range from 200 euros to 1,000 euros. In addition, fees will then be due. These are however often still smaller than the fees of conventional credit cards and lie with approximately two euro. Three examples:
- The Visa card from WireX enables 0.5 to 2 percent cashback.
- With WireX, cash withdrawals of up to 250 euros per day are free of charge, after which fees of 2.25 euros per transaction are incurred.
- The Visa card from Monaco (MCO) allows withdrawals of up to USD 1,000 free of charge.
Disadvantages of a credit card for Bitcoin
The biggest disadvantages of a credit card for crypto currencies are on the one hand the fact that sometimes only small amounts (sometimes only up to 250 Euro) per day can be picked up free of charge at the machine and on the other hand that the credit balance is immediately stored in Euro at some providers. The latter is both a curse and a blessing, depending on how the exchange rates develop.
However, the demand for Bitcoin credit cards remains high. Consumers want a way to spend their crypto currency. The credit card is the best way to do this. The fees are low and the handling is familiar and simple. Also for this reason the demand seems to continue to rise.
Development of Bitcoin credit cards
With the advance of the crypto currency into society, the desire to integrate the currency into everyday life became more and more important. An important step here is the development and establishment of a credit card. However, various hurdles have to be overcome.
On the one hand, an existing credit card with many acceptance points has to be connected in order to integrate it into everyday life in the best possible way. On the other hand, different crypto currencies have to be combined on one credit card so that one does not need a credit card for each individual when owning several digital currencies.
Initially, the focus was on the two largest crypto currencies, Bitcoin and Ethereum. The will to integrate further crypto currencies into the payment method with credit card is, however, available and will be expanded.
What happens next with Bitcoin credit cards?
Despite the crash, the idea of a credit card for crypto currency has by no means died. On the contrary, interest continues to grow. Currencies such as Bitcoin have stabilised after the rapid fall in prices at the beginning of the year. So far, there are still only a few providers on the market, but the list of interested parties is very long. Many companies are experimenting and planning to issue their own credit cards.
The Swiss start-up Volinex once started to offer a solution for the wave crest problem via debit cards. At the beginning of this year, however, Volinex also had to stop its attempts and end its business. The combination of pressure on fees and uncertain regulation is like a minefield.
The Blockchain-Start-up Decoin, on the other hand, only a few weeks ago announced a new attempt to offer services such as Bitcoin credit cards and much more. Decoin is actually developing a stock exchange platform where crypto investors can share in the revenues.