Financial Insights That Matter
- If you believe cryptocurrency will continue to rise in value, consider a crypto rewards credit card.
- Before jumping on, though, make sure you understand how volatile crypto markets are.
- Look into what types of spending are rewarded before committing to a rewards credit card.
Americans love the cash back, travel, gift cards, and other rewards they can earn from swiping their credit cards. According to a 2024 Morning Consult survey, eight in 10 Americans have at least one credit card that offers rewards, and 88% say they value the reward programs their credit cards offer.
If you’re a rewards lover and a cryptocurrency fan, there’s a crop of cards that may hold extra appeal for you: crypto credit cards. These cards work similarly to other rewards credit cardsbut instead of scoring common rewards like airplane miles, you’ll earn cryptocurrencies such as bitcoin and ether.
“People who believe in the future of crypto appreciate cards that let them earn and use digital currencies,” says Brent Weiss, a certified financial planner and head of financial wellness at online financial planning firm Facet. Earning the rewards is akin to investing, since your rewards can grow in value if crypto prices increase.
“It’s similar to receiving stock shares for spending on a traditional card,” Weiss adds.
But these rewards also come with risks. Here’s what to know before opening a crypto credit card.
The state of crypto credit cards
Like crypto prices, the market for crypto credit cards has been volatile. When crypto was on a tear in 2021, several companies introduced these cards. But when bitcoin’s price dropped from roughly $64,000 per coin to below $20,000 per coin in less than a year and the collapse of major crypto firm FTX rattled the industry, those companies took note.
For example, digital asset lender BlockFi teamed up with Visa to launch a card that offered 1.5% back in bitcoin with every purchase in 2021, only for BlockFi to go bankrupt in 2022. The Upgrade Bitcoin Rewards Visa Credit Card is another example of a crypto card that’s no longer available.
Many in the industry are bullish on crypto, given President Donald Trump’s friendly stance toward digital assets. But for now, there are only two main options for people looking to earn crypto rewards with their credit card spending: the Gemini Credit Card and the Venmo Credit Card.
The Gemini card allows you to earn up to 4% back (the exact amount depends on the spending type) in bitcoin, ether, or more than 50 other cryptocurrencies. The Venmo card lets you sign up for a feature that will automatically use your earned cash back to purchase bitcoin, bitcoin cash, ether, litecoin, or PayPal’s stablecoin.
How crypto credit cards work
Crypto credit cards have similar transaction processes, provider networks and usabilities to traditional credit cards, Weiss explains. You can use them like a regular credit card at any merchant that accepts the network (most run on Visa or Mastercard), and your purchases go through instantly.
But while traditional credit cards might offer points or miles redeemable for travel, gift cards, or statement credits, crypto cards let you accumulate crypto, which can be held, traded, or converted to cash.
Pros and cons of crypto credit cards
Crypto credit cards come with pros such as growth potential — since the value of your crypto can grow faster than traditional cash back or points when crypto prices jump — as well as supporting crypto innovation and adoption.
But they come with downsides, too, including higher volatility. If you earn 1% back in bitcoin and bitcoin’s price drops 50% overnight, your rewards lose half their value instantly, says Ben Loughery, a certified financial planner and founder of Lock Wealth Management. Crypto also comes with regulatory uncertainty.
“Some banks are still hesitating to fully embrace crypto because of government regulations,” Loughery says. Regulatory changes could impact your card or how rewards are taxed in the future.
There’s also limited flexibility and an opportunity cost for crypto as a reward versus more traditional rewards like travel, gift cards and cash back.
“Rewards are often locked into crypto,” Weiss says. “You may lose out on the flexible redemption options.” He adds that in some cases, other rewards cards might offer better overall returns (like cash back or travel points) for how you spend.
Then, there’s the tax component. You’ll likely owe capital gains taxes when you sell or convert crypto — a consideration you don’t have to worry about with traditional rewards.
What to consider before opening a crypto credit card
When choosing a credit card of any kind, Weiss says to consider how you spend your money since different cards reward different types of purchases at varying rates, as well as how each card rewards you for spending.
You want a card that provides better rewards for what you actually spend money on, whether that be gas, groceries, meals out at restaurants, or something else. You also need to understand how you can redeem your rewards, as well as the fees and rates.
But a crypto credit card comes with the need for extra considerations. In addition to keeping up with a regulatory environment that’s in flux, you also want to take security precautions.
“Make sure your crypto rewards are held in a secure wallet or platform,” Weiss says. “Crypto theft and hacking are real risks.”