Crypto Credit Cards vs. Crypto Debit Cards: Key Differences


Cryptocurrencies were introduced as a digital alternative to fiat currencies. According to the Bitcoin whitepaper, the ultimate goal of its eponymous cryptocurrency is to evolve into a unit of account.

At present, many cryptocurrencies have become a medium of exchange. It means that many companies and online merchants accept cryptocurrencies like Bitcoin as payment for their services and products. This article is going to discuss Crypto credit cards and Crypto Debit Cards, which cryptocurrency investors can use to avail of crypto payment options.

What are Crypto Credit Cards?

It is best to understand credit cards before talking about their cryptocurrency variation.  Credit cards were first introduced in the 1950s when a member of the Diners Club, Frank McNamara, thought of this idea when he accidentally forgot his wallet at home.

Since then, credit cards have undergone a massive boom, and today financial giants like VISA and MasterCard serve billions of customers around the globe. Credit cards are a way of making payments without using ready cash.

Credit cards are issued by banks, and they depend on checks like Credit Scores to allow payments. The users can swipe their credit cards to settle their bills. After the introduction of the internet and services like e-commerce websites, credit card companies allowed users to make international payments using their products.

Today, credit cards are one of the biggest facilitators of global online purchases. Cryptocurrency credit cards work very much like other credit cards, but they allow their users to earn rewards by making more transactions in the form of valuable cryptocurrencies.

How do Crypto Credit Cards Work?

Crypto credit cards are created using the services offered by credit card service providers. Regular credit cards are issued by banks, and they allow users to make payments without having funds available in their bank account at present. The purchases made by credit card are settled at the end of the month by the users.

However, credit cards allow users to take a loan to make any payment in advance. Therefore, when users pay their credit card bills at the end of the month, they have to pay additional interest.

Cryptocurrency credit cards may work similarly. They may also be issued by banks, and their holders can make payments in the form of fiat currency loans. However, they can earn cryptocurrency rewards in exchange for making more payments. Some crypto credit cards also offer cash-back prizes to their users in addition to cryptocurrency rewards.

Consumers who are using crypto credit cards issued by brands like VISA and Mastercard can benefit from several exclusive features and benefits. Many online payment companies, such as PayPal, have also started to offer cryptocurrency payment services for their consumers.

Advantages of Crypto Credit Cards

Here are some of the most prominent benefits of crypto credit cards that make them very popular among users:

Free Cryptocurrency Rewards

The biggest benefit of using crypto credit cards is to make sure that the users will start collecting free cryptocurrency rewards for their purchases. With regular credit cards, there are almost no rewards because they are already popular and acceptable methods of payment.

However, crypto credit cards are new products that are intent on offering attractive benefits to their consumers to increase their traction among more users.

Furthermore, the rewards that are offered by crypto credit cards are in the form of valuable cryptocurrencies such as Bitcoin and Ethereum. At the same time, these products keep the other rewards for theirs, like payment bonuses, much like their regular counterparts.

Using a normal credit card, the buyer may only benefit from2 a % discount bonus. However, with crypto credit cards, the users are not only going to earn a 2% bonus but also collect crypto rewards, increasing their utility value.

Crypto Trading Orientation

Crypto credit cards have played an important role in introducing cryptocurrencies to many users that were unfamiliar with them. When the users of these cards get free crypto rewards, they are enticed to use them and learn more about their management, storage, and trading procedure.

Therefore, crypto credit cards are paving the way for active online users to get started with cryptocurrency products and normalize them using them as a viable and legitimate mode of payment. At the same time, they are a source of education for first-time users.

Once the users have earned their free cryptocurrencies, they are prompted to create a new digital wallet account to store them. The users may also increase their knowledge by interacting with digital currencies easily.

They can explore cryptocurrency exchanges to trade their crypto rewards or visit decentralized exchanges to swap their cryptocurrencies to diversify their portfolio. In other cases, these investors may also learn to create passive income by staking their crypto rewards and proceed to perform yield farming with them.

Crypto Utility

People have been using credit cards for decades even though they have to pay additional interest for their payments which increases the cost of their purchases. Therefore, credit cards are considered a normal and acceptable mode of payment in society.

However, there is still a lot of resistance and stigma attached to the use of cryptocurrencies. The introduction of cryptocurrency-free rewards with crypto credit cards has incentivized many buyers to get a chance to get familiar with cryptocurrencies and their usage.

At the same time, these cards are normalizing the culture of crypto payments. Both online merchants and buyers do not need to go through the hassle of using a third-party service provider to accept or use crypto payments due to this service.

Therefore, it is not wrong to say that crypto credit cards bring more value and utility to the greater DeFi market.

Limitations of Crypto Credit Cards

Here are some of the most important drawbacks of crypto credit cards that every user must be aware of before purchasing one:

Credit Limit Issues

Crypto credit cards are a new concept, and there are not many companies that are currently offering these services. Therefore, the users and online merchants that are looking to enable crypto payments may not have many options available to them at present.

Furthermore, users should not expect to earn a ridiculous amount of cryptocurrencies as rewards with crypto credit cards. The rewards offered by these products are fairly conservative.

At the same time, the users are given limited options for choosing the type of cryptocurrency they want as rewards which are limited in number. Regardless of the choice limits, more crypto credit cards are increasing in the markets; at the same time, all crypto rewards hold considerable value.

Crypto Price Volatility

Crypto credit cards may introduce their first-time users to the dangerous frequency of price volatility for cryptocurrency products. Consumers may be aware of stock trading and forex trading markets, but cryptocurrency markets can throw many off-balance on account of their massive price changes that are much more unstable in comparison to other financial products.

The crest and trough of price changes for cryptocurrencies are often much steeper than other investment products. Therefore, if the users are not equipped with suitable risk management strategies, they might opt out of crypto trading markets.

What is Crypto Debit Card?

Debit cards are the payment facilitators that are issued by a bank to allow consumers to make payments without cash. Using debit cards can enable consumers to avoid the hassle of withdrawing cash from their bank accounts frequently.

Many merchants, both online and offline, have software that allows them to accept payments digitally using debit card options. Crypto debit cards allow their users to make instant payments using their cryptocurrency reserves.

These cards have removed the hassle of needing third-party service to convert the cryptocurrency reserves into cash before using them for making any purchases or other uses.

How do Crypto Debit Cards Work?

When a person who is already trading cryptocurrencies makes a profit, they can face issues making payments with their new wealth. In most cases, the users are prompted to make payments after they have converted their cryptocurrency reserves into fiat currencies.

This conversion not only takes time but can also increase the cost of making payments because crypto-to-cash conversion services charge service charges and transaction fees.

At the same time, despite earning profits in the form of cryptocurrencies, the users are unable to benefit from their reserves immediately.

However, the users can take advantage of crypto debit cards, and they can make payments using their cryptocurrency holding directly. The services provider of the crypto debit card will change the cryptocurrency into cash before paying the merchant. They are also free from any additional interest for payment because they work using the pre-paid model.

It means that before using this card, the user must load their account with sufficient balance with cryptocurrencies to make the payment. Most crypto debit cards are attached to a checking account or digital wallet to source the required balance.

Advantages of Crypto Debit Cards

There are many important benefits of crypto debit cards that are mentioned as under:

Better Crypto Utility

Cryptocurrency investors may be able to make massive profits using trading techniques, but if they are unable to use their profits, it can be a hassle. Crypto debit cards solve a real problem plaguing cryptocurrency investors for using their reserves without facing any issues. There is no need to invest time and energy in converting the available crypto balance into fiat currencies due to the benefit of crypto debit cards.

Furthermore, making payments using crypto debit cards is cheaper as the users do not have to suffer from the additional fees of crypto transfers and service charges from crypto to fiat swap service providers.

Additional Features

Crypto debit card holders benefit from a variety of programs and features. These feature range from offering premium security for the checking account of a cardholder, and it can extend to exclusive customer services attention. Many options offer rewards programs for making more transactions.

Some online merchants and brands may partner with crypto debit card companies and offer their consumers exclusive discounts. At the same time, the users may enter into lucky draws, and they may gain access to unique offers and cash-back points.

Tax Advantages

Cryptocurrency investors try to hold their position for at least a year for smaller tax deductions. If they need to make payments with their cryptocurrencies, they may lose the tax advantage by converting their reserves into fiat currencies.

However, when the users are working with crypto debit cards, they do not have to pay taxes on their crypto profits because they can make payments directly without having to exchange their cryptocurrencies for fiat.

However, the users may have to pay taxes on the new assets or merchandise they have purchased using cryptocurrencies.

Limitations of Crypto Debit Cards

Here are some of the important disadvantages of crypto debit cards that investors have to deal with:

Limited Features

Crypto debit cards are currently available are not many. Therefore, there are only a handful of options for the users that are seeking to benefit from this service. On the other hand, the features and incentives that are offered by the available crypto debit card options are very limited.

Therefore, consumers may feel discouraged about buying these products in their current form. However, it is possible that in the future, more digital payment companies and banks will start issuing crypto debit cards that allow users to take advantage of a greater array of features.

Security Issues

Many cryptocurrency debit cards have been the subject of scandalous media attention on account of security issues. The consumers who use these products end up losing their current reserves due to hack attacks or exploits.

Banks and other financial companies are working with blockchain developers to rectify such issues to ensure better security for their consumers. Meanwhile, users can avoid such incidents by choosing to work with brands that have a solid technical background and a proven track record.

Crypto Credit vs. Crypto Debit Cards: Comparison

Now that it has been established what crypto debit and credit cards are, it is time to perform a side-by-side comparison. Using this comparative analysis, the reader can understand what the best option for their financial needs is:

International Payments

Both crypto debit and credit cards can be used for making international payments. However, online merchants have a greater preference for offering credit card payment options for their consumers.

There are digital payments giants such as VISA and Mastercard that allow their users to make international online payments using both credit and debit card options.

Using the credit or debit card products from these companies, users can settle bills across 200 countries. The merchants who are setting up online stores that are open to consumers on an international scale can also get better benefits and easier setup by adopting payment channels offered by these brands.

Rewards and Benefits

At present, the rewards and benefits that come with crypto debit and credit card options are both quite similar. The consumers may be able to access exclusive discount offers on account of partnerships with different brands.

Meanwhile, credit card users can also earn special cryptocurrency rewards by increasing their transaction count. At the same time, both credit and debit card users can also participate in the bonus grant features, where they can earn cash back or other financial incentives by increasing their monthly swipes.

Payment Options

Crypto credit cards allow users to make payments in the form of fiat currencies, which means that they are not connected to the account of the users. Meanwhile, crypto debit cards offer the convenience of making direct payments using fiat currencies.

Utilizing this option can bring tax benefits for the user, and it can also remove the hassle of using third-party fiat conversion services.

Credit Checks

Consumers have to be very careful when they are using crypto credit cards. If they fail to make timely payments, they can risk reducing their credit score. With the decreasing credit scores, consumers can suffer from smaller payments option available to them.

On the other hand, there is no need to worry about credit scores when using debit cards. However, the account holder can only use the currently available funds and not make any purchases on credit.

Transaction Cost

The cost of the transaction using crypto credit cards is always greater. The consumers of this product have to account for the additional interest they have to pay in addition to the original cost of their purchase. At the same time, the user of crypto credit cards also has to spend more money on fiat conversion of their cryptocurrency payment reserves.

Meanwhile, debit cards are much cheaper and affordable to use. They save costs by reducing taxes and saving transaction costs, and there are no interest payments attached to them. However, the issuer can charge service charges for debit cards, but they are not as high as interest payables.


Both crypto credit and crypto debit cards consist of advantages and drawbacks. It is up to the cryptocurrency investor to pick the option that is most suitable for their lifestyle.  As more people are getting familiar with cryptocurrency trading, more online payment services are partnering with DeFi entities to issue a wide array of crypto debit and credit card options.