When you buy cryptocurrency – whether it is ethereum, bitcoin or any other digital coin – it usually stays in a wallet. Unless you transfer it to another account, spend it on NFTs (or other items you buy via crypto) or convert it to a government-issued currency, such as the US dollar, and It remains inactive until you do not withdraw to deposit in your bank account.
However, with the increasing interest in cryptocurrency over the past few years, millions of people have crypto they want to spend but don’t know how to do. That’s where crypto debit cards come in. They let you use the cryptocurrency in your digital wallet when shopping at grocery stores, gas stations and other retail outlets.
If you own cryptocurrency and want to spend it in the real world, here’s what you need to know about getting a crypto debit card.
What is a Crypto Debit Card?
A crypto debit card is like your regular debit card, but instead of being connected to your bank account, it is linked to a digital wallet that holds your cryptocurrency. With each transaction, the cryptocurrency you own is automatically converted into a government-issued currency accepted by the retailer, such as US dollars, to complete the purchase.
What are the pros and cons of using a crypto debit card?
Although crypto debit cards help you spend your cryptocurrency to make purchases, there are a few things to keep in mind before applying for one.
Advantages of Crypto Debit Card,
- It is easy to spend cryptocurrency in your wallet.
- Some cards come with cash-back rewards.
- You can store and use traditional currencies like dollars to make purchases.
Disadvantages of crypto debit card,
- You may have to pay transaction, withdrawal or exchange fees or a monthly flat fee.
- You have to pay capital gains tax on each transaction.
- Cards may be limited to certain areas where you can use the card.
How do I get a crypto card?
If you are ready to get a crypto debit card, you must first create an account with a cryptocurrency exchange or digital wallet and then transfer the cryptocurrency to your account or purchase it.
Know that there are waiting lists to receive cards. Once you have completed the setup requirements, including verifying your identity, you can apply for the card. Then depending on the size of the list it could take weeks or even months to arrive.
Which crypto debit card should I consider?
Choosing a cryptocurrency exchange or wallet depends on several factors, such as the type of cryptocurrency you have or cash-back rewards. Here are some of the biggest:
- Coinbase, one of the largest crypto exchanges in the US, offers the Coinbase Card, a Visa debit card that lets you use your crypto assets to make personal and online purchases. This card is currently available for select US customers.
- Crypto.com, another cryptocurrency exchange, has a variety of debit card options offering various crypto rewards – depending on how much you are willing to pay.
Two other crypto debit cards to consider are the Binance Visa Card and the recently announced Robinhood Cash Card.
If you are interested in earning crypto rewards, you can also explore crypto credit cards, which allow you to earn rewards back on everyday purchases in the form of cryptocurrency.
Can I use my debit card from a major bank with crypto?
Right now, for example, debit cards from Bank of America, Chase, Citibank and Wells Fargo do not handle cryptocurrencies. However, you can use your crypto debit card at their ATMs, but expect to pay a fee if you do.
New to cryptocurrency? Here’s an explainer on how to buy and sell bitcoin, as well as a guide on how to keep your cryptocurrency and money safe.
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