6 Best Tips to Choose a Crypto Card That Suits You

Cryptocurrencies have taken the world by storm, and many people are now looking for ways to use them in their everyday lives. One of the ways to do this is through the use of crypto debit cards. These cards allow you to spend your cryptocurrencies just as with traditional debit cards, but with additional benefits such as lower fees and rewards programs. However, finding a crypto debit card that suits your needs can take time and effort. In this guide, we'll go over some tips to help you pick a feature-rich crypto debit card.

What Are Crypto Debit Cards?

Crypto debit cards are essentially payment cards that allow you to make purchases directly using your digital currencies without converting them to fiat currency. Similar to traditional debit cards, crypto debit cards like the Bybit Card allow you to withdraw cash at ATMs, or use them for both online and offline transactions. The only difference is that these cards link to a cryptocurrency wallet instead of a bank account.

Typically, card issuers partner with payment networks and providers such as Mastercard, Visa and Swipe to offer crypto debit cards to users. 

Benefits of Using a Crypto Card

Crypto holders sometimes experience frustration when withdrawing crypto (off-ramping) or converting it to fiat. Using a crypto debit card means you can skip the hassle or complicated off-ramp process when paying merchants who don't directly accept crypto. The cards automatically convert your crypto to dollars or fiat currency, enabling seamless off-ramping.

In addition, they provide a convenient way to use your digital currencies for everyday transactions. You can pay for your shopping online or in-store, straight from your regular crypto wallet. 

Finally, crypto debit cards offer rewards and cashback programs that incentivize you to use your crypto cards for purchases – a nice perk if you use them frequently. The percentage of cashback can vary, and some providers may also offer additional rewards or bonuses for using their cards, such as waived transaction fees and discounts on specific services. For example, the Bybit Card's loyalty rewards program includes rewards from partners, including unique offers and access to exclusive experiences.

How to Choose a Crypto Debit Card

If this is your first time using a crypto debit card, you may not be aware of the features it offers. Consider the following factors when choosing a crypto debit card for your wallet.

The Supported Cryptocurrency

Before choosing a crypto debit card, check to see if it supports your cryptocurrencies. Although there's no cap on the number of cryptocurrencies a crypto debit card can support, crypto debit card issuers may only endorse a certain number of selected coins. Some cards support a limited number of digital currencies, while others support a more comprehensive range of cryptos. Also, consider the cryptocurrencies you might add to your portfolio later on so that the card you finally select will remain useful.

Transaction and Conversion Fees

Crypto debit cards come with transaction fees and conversion charges. These fees can vary significantly between cards, so comparing the costs is essential before choosing a card. For example, some providers may waive certain fees, particularly for users who meet a specific monthly or annual transaction volume threshold. Look for a card that offers lower fees in order to save costs and maximize the value of your digital currencies.

Regulatory Compliance

Regulations for cryptocurrencies and crypto cards vary by country. Before choosing a card, check to see if it complies with all relevant regulations in your country. Choose a card that operates in your country and fully complies with all applicable laws and regulations to avoid legal issues. For instance, Binance Visa Cards will not work in the U.K. and the U.S. The Bybit Card, meanwhile, will be available for users residing in European countries, and there are plans to expand its services to users beyond Europe who are within regulatory compliance. 

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Merchant Adoption

Compare and research different cards to find one that meets your needs, and is widely accepted by merchants in your area. You can find the list of supported merchants on the card issuer's website. Also, check to see if the card is accepted by major payment platforms such as Visa or Mastercard, since more merchants will accept the card. 

If the card isn’t widely accepted, it may not be useful for everyday transactions. Crypto debit cards may only be accepted in certain countries or regions, so be sure to check the issuer's website for a list of supported countries to ensure you can use it while traveling.

Card Issuer

The reputation and reliability of the card issuer are critical factors to consider. Look for cards that are issued by reputable issuers to avoid fraud and security risks. Choose a card issuer with a solid track record of providing reliable and secure services to ensure your digital currencies are safe. For example, Bybit has deep liquidity, a good track record of proof-of-reserves, and a dedicated support team to answer all queries. 

When researching card issuers, look for reviews and feedback from users and industry experts. Ideally, crypto debit cards use security features such as two-factor authentication and biometric IDs, and are licensed and regulated by a reputable financial authority. Lastly, the card issuer should have reliable and efficient customer support you can contact in case of any issues or concerns.

Rewards and Cashback

Many crypto debit cards offer rewards and cashback programs. Compare cards and choose one that provides rewards for the transactions you make the most, and at the best rates available. Check to see if the rewards program has restrictions, such as a minimum transaction amount or a maximum cashback limit. 

Also, consider the types of rewards offered. Are they in the form of digital currencies, fiat currencies, or other perks? If you’re interested in even more passive rewards, check out cards that have a referral program. Card issuers may reward you for recommending their card products to friends and families. For instance, Bybit Card offers enticing programs for successful referrals. The more people you refer, the bigger the rewards you can get.

Limitations of a Crypto Debit Card

While crypto debit cards offer several advantages, they also have some limitations.

• Volatility: The values of cryptocurrencies are notoriously volatile, which means that the value of your card's balance can fluctuate quickly. This volatility also affects any reward you earn for using the card: Its value will often change based on prevailing market conditions, unlike fiat reward points, where the value is stable.

• Taxation: For tax purposes, the U.S. Internal Revenue Service (IRS) classifies cryptocurrency as property, which means that each time you use a crypto debit card it may be considered a taxable event. Therefore, if you use cryptocurrency to make a purchase, you must calculate any gains or losses on that transaction and report it on your tax return. We recommend crypto card users check their local taxation policies before applying for a card. Note: This applies to crypto credit or debit cards that are legally available in the U.S. only. 

• Acceptance: Some merchants may not accept crypto debit cards, thus limiting the cards’ usefulness. Additionally, many countries regulate the use of cryptocurrency, and residents may thus be restricted from using a crypto debit card.

• High fees: Some card issuers charge multiple fees, which could add up to a significant amount. Apart from transaction fees, you may have to pay others, such as inactivity fees, as well as a fee for the physical card.

Do I Need a Good Credit Score to Apply for a Crypto Card?

One of the advantages of using a crypto debit card is that you don't need a good credit score to apply for it Unlike traditional credit cards that require a credit check, crypto debit cards don't require credit history verification. Crypto debit cards are similar to conventional debit cards that draw funds from your existing assets, invalidating the need for credit verification. Whether you have poor credit or no credit history, you can apply for and get a crypto debit card.

However, some crypto debit card providers may require a certain amount of digital currency in your account or wallet before issuing you a card. 

Are Crypto Card Rewards Taxable?

While the IRS hasn’t provided any guidelines on how to treat crypto card rewards, the earned reward might be treated similarly to fiat rewards, which are considered tax-free rebates on spending. However, the value of crypto card rewards can fluctuate, and redeeming crypto rewards earned from debit cards can be viewed as a taxable event. This means that if you sell or trade the rewards, use them to purchase goods or services, or exchange them for other cryptocurrencies, you may be subject to capital gains taxes. 

Capital gains tax would apply to any profits (capital gain) made when you dispose of your crypto, which depends on the changes in the value of your cryptocurrency rewards since you earned them. You may have to consult a tax professional or accountant to properly determine how to report and pay taxes on your crypto card rewards.

The Bottom Line

Crypto debit cards offer a convenient and accessible way to use digital currencies for everyday transactions. When choosing a crypto debit card, consider the supported cryptocurrencies, transaction and conversion fees, regulatory compliance, merchant adoption, card issuer, and rewards and cashback programs. Also, be aware of the limitations of crypto debit cards and the tax implications of rewards and cashback programs.

With the right crypto debit card, you can enjoy the benefits of using digital currencies while avoiding the costs and limitations of traditional banking systems. By following these tips, you can choose a crypto debit card that suits your needs and helps you make the most of your digital currencies.

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