Cryptocurrency payments and credit cards – a reality? How do they compare to traditional credit cards?

Cryptocurrencies have come a long way, and the financial instruments that facilitate cryptocurrency payments have evolved with them. One such innovation is the cryptocurrency credit card. But what exactly is a crypto credit card and how does it compare to the traditional credit cards we are all familiar with?

What is a crypto credit card?

In principle, a cryptographic credit card works similarly to a traditional credit card. You get a line of credit from the issuer, make a purchase, and pay the balance at the end of the billing cycle. The difference? Instead of receiving rewards in the form of cash back or travel points, you receive crypto payments. Depending on the card and your preferences, these can be popular coins like bitcoin, ethereum or even stablecoins.

Let’s say your card gives 2% back to restaurants. Instead of $2 cash back for a $100 dinner, you would get $2 worth of bitcoins or other cryptocurrency. These rewards go straight into your linked cryptocurrency wallet, making it very easy to accumulate digital wealth literally every day.

Our Divicoins platform makes it easy to convert fiat to multiple cryptocurrencies. And thanks to our strict security measures, you can rest easy knowing that your cryptocurrencies are well protected as you grow your digital portfolio with daily purchases.

Cryptocurrencies and traditional credit cards – a breakdown of conventional and cryptocurrency payments

Similarities:

• How they work: Both cryptocurrencies and regular credit cards can be used to make purchases and pay later. They have similar protections and privileges, especially if they are backed by big names like Visa or MasterCard.
• Earn rewards: Whether it’s a regular credit card or a cryptocurrency card, you get something back for your spending. Traditional cards can give you points, miles or cash back. Crypto cards, on the other hand, reward you with digital currency. Either way, your rewards usually accrue depending on how much you spend, and you get bonuses for certain categories.

Differences:

• What you earn: Big difference? The currency of your rewards. Cryptocurrency credit cards offer rewards in a cryptocurrency that can be both exciting and risky. 
• Taxes: Here’s something to consider – there may be tax implications associated with earning and spending cryptocurrencies. In many places, the conversion or use of cryptocurrency may trigger a taxable event, i.e. you may have to pay tax on any profit you make from the cryptocurrency reward. This is usually not a concern when using traditional cashback or points cards.
• Fluctuations in value: Unlike the stability of traditional rewards (a dollar earned today is still a dollar tomorrow), the value of crypto payments can fluctuate. This means that the cryptocurrency you earn may be worth more or less when you decide to use it, depending on market conditions.

Is a crypto credit card right for you?

Cryptocurrency credit cards are a unique way to dive into the world of cryptocurrencies, especially if you are already a fan of cryptocurrency payments.

When you spend, you earn digital assets, so it is a passive way to increase your cryptocurrency holdings. But remember that these cards don’t come without complexities. Market volatility and potential tax issues mean that these cards may be best suited to those who are already familiar with digital currencies and understand the risks.

And for participants who want to buy cryptocurrencies directly rather than waiting for rewards to accrue, Divicoins is your trusted partner in the world of cryptocurrency. Our streamlined registration and verification process ensures that you can access cryptocurrencies quickly and conveniently, whenever and wherever you need them.

Risk warning: Exchanging digital currencies is considered a risky transaction with highly speculative outcomes. Buying or selling a cryptocurrency carries a high level of risk. The Company does not act as a financial advisor, nor does it provide investment advice or recommendations. The Company does not guarantee any profit from any activity related to its services. You should carefully consider whether owning digital currency is appropriate in your financial circumstances.