What Are Crypto Cards and How Do They Work?

Introduction

While much of the interest in cryptocurrencies stems from their investment potential, there exists an equally important use case for transferring value through digital assets. Cryptocurrencies were originally conceived as global, digital payment systems rather than mere wealth-building instruments. Crypto cards represent one practical avenue to achieve this vision, enabling individuals to utilize cryptocurrencies and digital assets in their daily lives while earning rewards in the process.

With a typical crypto card, you can earn cryptocurrency rewards or instantly convert your digital assets into fiat currency to purchase goods and services. Both major payment networks support crypto cards through partner companies, meaning your cryptocurrency can be used at millions of locations worldwide.

What Is a Crypto Card?

A typical crypto card functions similarly to a debit card, allowing you to pay for items or services accepted by the card provider. However, while it may appear that you are paying a merchant directly with cryptocurrency, this is not actually the case. The merchant receives fiat currency in their account, not cryptocurrency.

Your crypto card withdraws cryptocurrency from your linked account, converts it into the local currency in which you are making the purchase, and then uses this converted funds to complete the transaction. Major payment networks provide crypto cards through licensed partner companies, ensuring that these cards are accepted by retailers almost everywhere.

Some crypto cards offer only cryptocurrency rewards for money spent using the card. These are typically credit cards that require a credit check for approval. Prepaid crypto cards, on the other hand, must be loaded with cryptocurrency before use, similar to traditional debit cards.

How Do Crypto Cards Work?

As mentioned previously, a crypto card does not actually pay merchants with cryptocurrency. Instead, it conveniently converts your digital assets into fiat currency that you can spend at merchants accepting the card.

Consider this example: you have 500 USD worth of BNB in your card's funding wallet. When paying a 100 USD restaurant bill with your crypto card, after inserting your card and confirming the payment, the system sells 100 USD worth of BNB and loads the equivalent fiat currency onto your card. The restaurant receives 100 USD, and you retain 400 USD worth of BNB in your funding wallet. This entire process occurs within seconds.

Many crypto cards also support ATM withdrawals if your service provider offers this feature. The same conversion method applies to cash withdrawals as described above.

Differences Between Crypto Cards and Traditional Credit or Debit Cards

While crypto cards and traditional payment cards function similarly for purchases, there are several key distinctions.

The primary difference is that prepaid crypto cards must be loaded with cryptocurrency, whereas debit cards are pre-loaded with fiat currency and credit card transactions are settled later with fiat funds. A prepaid crypto card operates like a conventional debit card—you must have funds in your account before spending. However, you can only load these cards with cryptocurrency, not fiat currency. When you make a purchase, your balance is immediately converted in your crypto wallet.

Crypto credit cards, conversely, offer a credit line allowing you to purchase now and pay later. Your credit card bill is payable in standard fiat currency, making crypto credit cards essentially rewards credit cards.

To obtain a card, you must be a customer of an organization already offering crypto cards, such as a cryptocurrency exchange or crypto-friendly bank. Before ordering your crypto card, you must complete Know-Your-Customer (KYC) and Anti-Money Laundering (AML) procedures, similar to traditional credit or debit cards. For crypto credit cards, you must also pass a credit check.

Advantages of Crypto Cards

The primary advantage of prepaid crypto cards is the ability to use cryptocurrency for everyday purchases. Previously, this was difficult unless merchants directly accepted cryptocurrency. Even then, transactions with certain coins like Bitcoin could take 30 minutes to confirm, and price volatility meant you might pay more or less than expected.

Many crypto cards also offer benefits such as cashback rewards or discounts on specific subscriptions like streaming services. These incentives mirror those offered with traditional debit and credit cards. It is advisable to compare offerings from different card providers to find the best benefits for your needs. Additionally, pay attention to potential currency conversion fees that may apply during transactions.

Risks Associated with Crypto Cards

Owning a crypto card carries similar risks as holding cryptocurrency. If you load your account with Bitcoin or Ethereum, the fiat value of your account will continuously fluctuate. Depending on exchange rates, you may not have exactly as much money in your account as you believe.

You should also consider that in many tax jurisdictions, spending cryptocurrency constitutes a taxable event. This applies regardless of whether you spend a small amount for coffee or thousands for a car. If you have made gains or losses with your cryptocurrency before using it for purchases via your crypto card, you must pay or deduct the corresponding taxable amount.

You can avoid this issue by purchasing stablecoins to use with your crypto card, as their prices rarely deviate from their fixed value.

Crypto Cards from Major Platforms

Leading cryptocurrency exchanges offer crypto cards to their verified users. For example, some major platforms provide Visa debit cards connected to user accounts. By loading your card's funding wallet, you can spend cryptocurrency anywhere the payment network is accepted. These cards function identically to the prepaid crypto debit cards described above.

These cards are available only to users from selected countries, primarily across Europe and certain other regions. To obtain such a card, you must have an account with the platform and live in an eligible country. You must complete all relevant KYC and AML processes before successfully applying for the card.

Available Countries and Eligibility

Crypto cards from major platforms are available in numerous European countries, including Belgium, Bulgaria, Denmark, Germany, Estonia, Finland, France, Gibraltar, Greece, Iceland, Ireland, Italy, Croatia, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Austria, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Czech Republic, Hungary, and Cyprus.

The application process is straightforward for existing account holders in eligible countries. After logging in, you can navigate to the card section and click "Get Started." You will then be prompted to review KYC information and agreements before proceeding to the card ordering page.

On the ordering page, you can select how your name will be printed on the card. After confirming your choice, your information will be pre-filled, and you can add any missing details. Finally, agree to the privacy policy, terms of service, and cardholder agreement before completing your order.

Upon ordering your card, you immediately gain access to a virtual card that you can use before your physical card arrives. This virtual card can be added to digital payment systems or used for online purchases.

Benefits of Crypto Cards from Major Platforms

Beyond the ability to spend cryptocurrency at merchants and restaurants worldwide, crypto cards from major platforms offer unique advantages and benefits.

No Fees. These cards are free for all users. There are no administrative, processing, or annual fees, though occasional fees from external providers may apply.

Retain Your Cryptocurrency. You do not need to convert your cryptocurrency into fiat currency to make purchases. The platform converts your assets only when needed, allowing your cryptocurrency to continue earning potential market gains.

Substantial Cashback Rewards. Depending on your monthly average cryptocurrency holdings, you can earn up to 8% cashback on all purchases. This cashback is credited to your account in cryptocurrency.

Secure Funds. Your cryptocurrency is secure and protected by the platform. Major providers implement robust security standards and maintain high levels of protection.

Virtual Crypto Payment Cards

Recent developments have introduced virtual payment cards linked to cryptocurrency wallets. These cards can be added to Apple Pay or Google Pay with just a few clicks, enabling direct payments using specific cryptocurrencies such as Bitcoin, Ethereum, and stablecoins through banking networks.

These virtual cards are now available to residents of numerous countries, primarily across Europe and select other regions. The issuance process is remarkably quick—for certain users, the entire process from KYC verification to card issuance takes less than a minute.

Key Advantages of Virtual Crypto Payment Cards:

1. Instant Issuance. The card is issued virtually immediately after app installation and KYC completion. The process is exceptionally fast for users in certain regions.

2. Minimal Fees. The sole conversion fee is 0.5% of the transaction amount. No other explicit or hidden fees are charged.

3. Broad Acceptance. The payment card is virtual, can be added to major digital payment systems with a few clicks, and is accepted at banking network terminals worldwide.

4. ATM Withdrawals. Users can withdraw up to 20,000 EUR per month at ATMs with appropriate readers.

5. Free Transfers. Transfers of various cryptocurrencies within the wallet are free, with no fees for payments to family members, friends, or acquaintances, and no usage restrictions.

6. Family Access. Users can easily install virtual cards for all family members and request payment cards for worldwide cryptocurrency payments.

7. Referral Program. Users can invite friends and earn up to 45% of transaction fees.

Through collaboration between virtual card providers and major platforms, using cryptocurrency for everyday payments has become increasingly accessible.

Conclusion

If you have cryptocurrency you no longer wish to hold long-term, crypto cards make conversion to fiat currency straightforward and efficient. Without a crypto card, you would need to complete the conversion process and manually transfer cryptocurrency to your bank account—a process that can take several days depending on your bank and exchange. Crypto cards represent one of the fastest methods to use your cryptocurrency for purchases and represent a welcome development in the cryptocurrency ecosystem.

However, always maintain records of your spending for tax purposes, as cryptocurrency transactions may have tax implications depending on your jurisdiction.

FAQ

What are crypto cards and how do they differ from traditional bank cards?

Crypto cards connect directly to crypto wallets, converting digital assets to fiat currency instantly at point of purchase. Traditional bank cards link to bank accounts using only fiat currency. Crypto cards enable spending digital assets while traditional cards support only conventional money.

How do crypto cards work? How do they convert digital assets into consumable form?

Crypto cards convert digital assets into spendable form by integrating with existing payment systems. Users can spend their cryptocurrencies like traditional cash or credit cards, eliminating complexity and enabling seamless daily consumption without merchants directly handling crypto.

What are the advantages and risks of using crypto cards?

Crypto cards offer convenient access to digital assets and enable seamless integration with the global economy. However, they carry risks including potential hacking, fraud, and security vulnerabilities. Users should implement strong security practices when managing their crypto card accounts.

Which cryptocurrencies do crypto cards support?

Most crypto cards support major cryptocurrencies including BTC, ETH, USDT, ADA, SOL, and MATIC. Support varies by card provider, with some offering additional tokens and stablecoins for enhanced flexibility.

What are the fees for crypto cards and what types of fees are included?

Crypto card fees typically include a 2% card fee and 1% transaction fee. Main fee types comprise card issuance fees and transaction fees charged during spending.

Are crypto cards accepted globally? What are the limitations?

Crypto cards are accepted worldwide where traditional payment cards are supported. Acceptance depends on merchant policies and regional regulations. Some countries may impose legal restrictions on crypto card usage and transactions.

How is the security of crypto cards guaranteed? Will they be subject to fraudulent charges?

Crypto cards utilize advanced encryption technology and blockchain verification, making unauthorized charges highly unlikely. Multi-signature protocols and real-time transaction monitoring provide superior protection compared to traditional cards, significantly reducing fraud risk.

How to apply for and activate a crypto card?

Register and activate your virtual crypto card first. Then visit your card account page, click the physical card section, and submit your application. Confirm your delivery address to complete activation and receive your card.

What are the mainstream crypto card products?

Major crypto cards include MetaMask Pay, Trezor Card, and Coinbase Card. These products support payments and consumption with multiple cryptocurrencies, offering seamless integration between digital assets and everyday spending.

What are the advantages of crypto cards compared to traditional wallets?

Crypto cards offer lower transaction fees, instant cross-border payments, direct cryptocurrency spending without conversion, enhanced security through blockchain technology, and greater financial accessibility for unbanked populations.