Bitcoin was the first well-known cryptocurrency on the scene. So it is no surprise that when crypto credit cards, debit cards, and prepaid debit cards made their debut many promoted bitcoin rewards as an alternative to traditional points or cash-back rewards.
Here we’ll explain how bitcoin credit cards work, available options, as well as cards offering rewards in other digital currencies such as Ethereum.
What Are Bitcoin Credit Cards?
Bitcoin credit cards usually refer to credit cards that offer the option of earning bitcoin as a reward. Unlike other crypto cards that may provide rewards for staking (allowing your crypto holdings to be used to validate other transactions), bitcoin isn’t staked. So these credit cards will offer bitcoin in lieu of cash back rewards paid in US dollars. Either you’ll be able to earn cash back and then use it to buy bitcoin, or earn points that you can use to get bitcoin.
What to Look for in a Bitcoin Credit Card
If the idea of earning bitcoin with a credit card appeals to you, keep in mind there aren’t an overwhelming number of options available at the moment. You can expand your search a little if you also include crypto debit cards and prepaid cards. But since credit cards offer the strongest protections under federal law if they are lost or stolen, you may want to stick with a credit card.
Of course, the basics of shopping for a credit card still apply here. You’ll want to understand the costs, including interest rates and fees. But beyond that, you’ll want to understand the rewards offered and how you or your business can maximize them.
If you are a business owner looking for a business credit card, there are even fewer crypto reward cards available. If your business spends a lot of money on digital advertising you’ll want to be aware of the fact that some cards limit how much crypto you can earn. Businesses with high spend will want to make sure they get the full rewards value available for those purchases.
Types of Bitcoin Credit Card Rewards
Most crypto rewards credit cards now offer a larger choice of rewards than just bitcoin. Some cards – especially those offered by cryptocurrency exchanges– may allow you to earn rewards in a variety of cryptocurrencies such as Ethereum, USD coin, Tether, Litecoin, etc.
The 6 Best Bitcoin Credit Cards
The best credit card for you or your business will depend on a number of factors, including costs and rewards. If you would like to earn bitcoin on some or all of your purchases, these cards are worth considering:
dash.fi Credit Card
The dash.fi card is perhaps the only business cryptocurrency rewards credit card (we couldn’t find any others when writing this article) including Bitcoin. With dash.fi, you can redeem rewards in flexible ways, including statement credits and cryptocurrencies. Earn bonus rewards for online advertising purchases and a competitive percentage back everywhere else.
Brex Credit Card
This business credit card allows you to earn points for eligible purchases. The amount you’ll earn varies, depending on the spending category, but they range from 1 to 8 points per dollar spent. You can opt to have some or all of your points redeemed in the form of cryptocurrency; currently Bitcoin and Ethereum. You’ll need a crypto wallet in order to redeem rewards with crypto. And a maximum of one million points can be redeemed for bitcoin.
Blockfi Rewards Visa Signature Credit Card
This card features a tiered rewards structure. The overall reward rate is an unlimited 1.5% back in crypto, but you can earn 3.5% back in crypto during your first 3 months up to $5,000, and 2% back in crypto on every purchase over $50,000 of annual spend. You can also refer a friend to get $30 in bitcoin. And there’s a trading bonus of .25% in bitcoin on eligible trades (maximum $500 in bitcoin per month).
Cardholders don’t have to choose bitcoin; choose any currency on the BlockFi platform, a cryptocurrency exchange, including stablecoins. But you can only be paid in the crypto you have chosen when rewards are paid out once a month.
Gemini Mastercard
The Gemini credit card is another rewards credit card that allows you to get rewarded with crypto. It has recently reopened after a waitlist. This card gives 1-3% back on eligible purchases but the amount depends on spending categories. You can earn 3% back on dining purchases, up to the first $6,000 in spend, then 1%. You can also earn 2% back on groceries. The standard reward rate is 1% on other purchases.
Because Gemini is a cryptocurrency exchange, there is a wide variety of crypto to choose from, including but not limited to bitcoin.
SoFi Credit Card
For every dollar spent using your SoFi credit card, you earn 2% unlimited cash back. 2 points which are worth 2 cents. You can then redeem your cash back directly into crypto through your SoFi active invest account using the mobile app. SoFi currently offers a variety of crypto to trade including Bitcoin, Ethereum, Polkadot, Dogecoin, Cardano, and 26 more coins. Also note that for security purposes, SoFi offers a closed system, meaning crypto can’t be transferred to external wallets.
Venmo Credit Card
With the Venmo credit card, you can use the cash back you earn to buy crypto. Cash back rewards range from 1 to 3%. You earn the highest level of cash back (3%) on your top spend category, 2% on purchases in the next highest spend category and 1% on everything else.
There is no fee for using your cash back to purchase crypto. Bitcoin is one of the four options available; the others are Ethereum, Litecoin, or Bitcoin Cash. You can change your choice of crypto in the Venmo app.
Do You Have to Pay Taxes on Bitcoin Rewards?
The taxation of Bitcoin rewards is a rather complicated topic and may be changing. You should talk to your tax consultant about any concerns you have. But in general, you do not have to pay taxes on bitcoin rewards or any bitcoin you buy. However, if you sell bitcoin, use bitcoin to buy goods/services, or use bitcoin to buy another cryptocurrency you will probably have to pay taxes.
How do Bitcoin Credit Cards Work?
Bitcoin can’t be staked, unlike some other cryptocurrencies. This means that in order to get bitcoin with a credit card you are limited to two options.
With these cards, the credit card issuer will typically offer cash back in fiat currency (such as US dollars). Then when you choose crypto as your rewards it will automatically purchase the cryptocurrency when you are eligible for reward redemption. The other option is to offer points that can be redeemed for crypto. Again, you will often have a choice of cryptocurrency beyond just bitcoin.
If you decide you don’t want to take your rewards in the form of crypto most of these cards will allow you to choose cash back, or in some cases, travel rewards as an alternative.
How to Choose the Right Bitcoin Credit Card for You
As with any card, whether it is a credit card or a debit card, you need to consider:
The annual fee
Interest rate/APR
Foreign transaction fees
Credit score required to qualify
Additional perks, sign-up bonus/welcome bonus, etc
Rewards program details
Typically crypto debit cards and prepaid debit cards are better for individuals who can’t qualify for a credit card because of a bad credit score but still want to earn cryptocurrency from qualified purchases.
Credit cards offer consumer protections against unauthorized charges which makes them the safest choice. Of course, it can be harder to qualify for a credit card and they can have high APRs, so if you aren’t able to make your monthly payments you can end up in significant debt.
