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Will Crypto-based Credit Cards Take Over The Financial Services Industry

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Over the past couple of years, a disruptive force has quietly emerged within the world of fintech and blockchain technology in the form of crypto-based credit cards. 

Crypto-based credit cards represent an enormous opportunity for financial service providers. In fact, a host of big banks and card networks are pushing to launch their cryptocurrency-based credit cards to capture a share of the rapidly growing cryptocurrency market. 

Let’s take a closer look at this emerging trend;

What is a Crypto-based Credit Card?

A crypto credit card is a credit card that allows you to make cryptocurrency purchases depending on your ‘accrued debt’ while also receiving crypto rewards

The credit amount agreed upon with the card issuer, inclusive of other costs, is accrued debt.

A crypto credit card would allow you to perform the same functions as a traditional credit card, except that payments would now be made in cryptocurrency.

These credit cards may also offer cashback rewards, but in the form of crypto. This presents an interesting opportunity for consumers, who can do their regular online retail shopping, while earning a bit of cryptocurrency in cashback rewards, which could possibly amount to greater values as the crypto market is constantly fluctuating in value.

How Do Crypto-based Credit Cards Work?

A crypto-based credit card functions just like a traditional credit card. When you make purchases using a crypto-based credit card, you get rewarded with a percentage cash-back in crypto, just like with conventional reward cards.

The rewards received on crypto-based reward cards come in bitcoin or other types of cryptocurrency depending on the crypto credit card you use and are also dependent on the requirements set by your financial service provider.

Where Can I Get A Crypto-based Credit Card 

There are several crypto reward credit cards available on the market, an example of which is the Sofi Credit Card.

Sofi Credit Cards allow you to convert points to crypto and applying for a credit card is easy If you have a Sofi investment account. You receive 2% cash back on eligible purchases with a SoFi credit card, which can be redeemed in up to 20 different cryptocurrencies on SoFi Invest.

Pros Of Crypto-based Credit Cards

Crypto-based credit cards come with a slew of advantages, but perhaps the most important of them all is the ease of claiming rewards.

That’s because many companies that offer crypto-based credit cards own their crypto exchanges – allowing their customers to convert their crypto rewards into U.S dollars easily through their credit cards.

Another advantage of crypto based credit cards is appreciation. Over the years the value of cryptos like Bitcoin and Ethereum have grown leaps and bounds and are still growing to date. Crypto-based credit cards offer an opportunity for value appreciation on your credit and rewards.

A crypto credit card is arguably a form of passive investment, all you need to do is stack up your crypto rewards and watch them grow over time.This way without constantly monitoring the crypto market you can make passive income.

Bottom Line

Over the years, there has been a shift in how payments are made. Fifty years ago, transactions would have been only by cash or cheque, but with the advent of technology, we now have debit and credit cards which have eased the payment process.

However, international transactions have not been so smooth due to government policies, this brought about the need for cryptocurrency credit cards. Crypto-based cards do not face regional restrictions, making their application boundless.

The financial services industry adapts to the time, and based on the pros of crypto-based credit cards, we are witnessing crypto-based credit cards becoming a vibrant part of the financial service industry.