The world of finance is changing, and so are the requirements of a generation living fast paced culture. For people, still using bank cards and investing in traditional structures, crypto can be overwhelming. It can be a difficult task for them to understand that digital currencies do have real-world usage. It is for these people that crypto cards come in handy, making crypto payments as easy as using traditional cards.
A crypto card is like that bridge that connects two shores, a crypto ledger, and a checkout machine. These cards, integrated with Visa or Mastercard, allows user to spend supported currencies globally.
Through this simple guide, you will learn how to use crypto card to pay for your morning coffee without manually selling your crypto.
What is a Crypto Card, and How to Use It?
A crypto card, just like traditional cards, can be either a credit, debit, or prepaid card. Where a credit card provides a limit, keeping some amount of their crypto holdings as collateral. Debit cards, on the other hand, are directly linked with users’ cryptocurrency wallets or exchange accounts and allow them to use crypto card for daily payments. Finally, a prepaid card, like Cardaxo, allows users to load supporting currency in their Cardaxo wallet and then use it in real-time.
These cards use well-established payment gateways like Visa and Mastercard, making them usable at millions of global merchants. In short, they are just like the traditional cards, but they draw funds from users crypto holdings.
How Does a Crypto Card Convert Crypto to Money?
The core feature supported by these cards is their ability to convert crypto to fiat instantly. At the moment of the transaction. Let us understand using an example:
- You use your crypto card to buy groceries worth $100.
- Merchant’s payment network sends a request for $100 to your card provider.
- The provider sells the precise amount of crypto required to cover the call, here $100, and any other fee (If required).
- The $100 will be paid in the merchant’s local currency (USD, EUR, etc.)
This crypto card payment process is smooth and does not require manual selling of crypto, closing the window for calculations, and the conversion wait time.
Things You Need Before Using a Crypto Card
Creating & Verifying Your Account
The first step to start using a crypto card is selecting a crypto exchange or a platform that supports the digital currency you hold. Like Cardaxo supports, all major crypto currencies available in the market. Once you are able to shortlist your preferred platform, sign up for an account and get your KYC verification done. For KYC, you will have to submit your identification documents, such as a passport. Getting KYC done is an essential step that is required by the platform to comply with financial regulations and to enable card transactions.
Activating the Card
Once you receive your virtual or physical card, you will need to activate it. Go to the card provider’s app or website to do the needful. They might prompt you to set up a unique PIN or password, or configure any other security options offered by them. Comply with it to get the best security for your crypto.
Your Wallet
If you have opted for a crypto credit card, then you will have to deposit your crypto to your preferred platform. This will serve as your collateral, and you will be provided with the line of credit against the same. Now, you can spend this fiat at any merchant just as you traditionally spend it using your bank cards. The repayment options of this fiat usually offer flexibility through fiat, stablecoin, or crypto.
If you have opted for a crypto debit card, then you will have to link your crypto exchange to your debit wallet. Everytime, you swap your card, your crypto will be converted to fiat. It is just like traditional debit cards, with crypto as currency.
Finally, if you have opted for a crypto prepaid card, like Cardaxo, then you must deposit supporting cryptocurrencies into it before using it. Review the issuer’s terms and conditions around minimum balance requirements (if any). A prepaid card will keep your major crypto holdings separate and will help you budget your crypto spending.
Crypto Card Step-By-Step Guide For Everyday Expenses
Choose Where you want to Pay
Crypto cards, like traditional cards, are accepted everywhere, in supermarkets, restaurants, or online stores. Just look out for a Visa/Mastercard logo at the POS terminal or online checkout page.
Swipe or Tap Your Crypto Card
If you have a physical card, then swipe or insert it into the POS machine, and if it is a virtual card that you are holding, then just tap it to make your payments. Similarly, for online purchases, you need to enter details like card number, expiry date, and CVV. The crypto card transaction process is the same as it is with any credit or debit card.
Conversion and Confirmation:
The card provider’s system will instantly convert the required amount of crypto without any delay. Once done, you will be welcomed by a transaction success message at the POS or online store. Your crypto card provider’s app will also update your wallet balance in real-time. Simultaneously, you may trace the exact amount of crypto deducted along with any associated fees through their ledger.
Where Can You Use Your Crypto Card in Daily Life?
There are multiple places where you can spend crypto with card. You may use it at any local shop or supermarket that accepts card payments. Also, websites like Amazon or any other local e-commerce platform accept these cards seamlessly. One can easily pay recurring subscriptions or utility bills by entering the crypto card details as a mode of payment. Finally, hotel bookings, meals at restaurants or cafes, movie tickets, and popcorn can all be covered through a crypto card.
In short, everything that can be covered using traditional debit or credit cards can be covered by a crypto card.
Fees, Limits, and Conversion Charges Explained Simply
Transaction Fees
There are usually a couple of heads under transaction fees:
- Conversion fees: This is a percentage, usually small, that is charged when your crypto is converted into fiat at the point of sale.
- ATM withdrawal fees: This could be the charge a user might have to pay if they prefer withdrawing cash from an ATM.
- Foreign transaction fees: Some cards charge this fee if users make purchases in a currency different than their card’s base currency.
Daily Spending and Withdrawal Limits
Some crypto card issuers usually impose daily spending and withdrawal limits. This is done to enhance users’ security and to comply with regulatory policies. Users may check their limits through their card’s app.
Is It Safe to Use a Crypto Card for Everyday Expenses?
Crypto cards come with security features that everyone should know about:
- PIN protected: Most of the cards are protected by a unique security PIN selected by the user. This PIN is required while making all physical transactions.
- Card freezing: This security feature enables users to instantly freeze or unfreeze their card via their app in the event of card loss.
- Encrypted transactions: Every transaction data between your crypto card, the payment terminal, and the card issuer is scrambled using a cryptographic algorithm and is unreadable.
What to do if your card is lost or stolen: If you somehow lose your card, the thumb rule is to block the card instantly. Go to your card provider’s website or app and freeze your card to prevent misuse of your crypto holdings. Next, contact customer support to order a replacement.
How Crypto Cards Work to Smartly Save Money?
In the case of crypto debit card usage or a credit card, regularly tracking your crypto spending history keeps you in check. It helps you avoid overspending, giving you a clear understanding of how crypto is being used. If using a prepaid card like Cardaxo, you budget yourself beforehand, letting you add more crypto only once you exhaust your decided limit. This way, your crypto stays in control, and your spendings are defined by a budget.
Cashback and rewards also play a crucial role in saving more money. Many cards offer attractive rewards in the form of their native token or via crypto for every purchase. It is suggested to use a crypto card for daily payments over traditional cards. This way, you will be able to reap the maximum benefits of this feature.
For every crypto enthusiast, a crypto card acts as a boon. It is an ideal solution to transform crypto from a long-term investment to a practical tool for our day-to-day life. Now that you know how simple it is to use a crypto card for everything from groceries to luxury, it must not be daunting for you to use it if you are investing in crypto. The future has always been about adaptation, flexibility, and modern choices, and crypto cards are offering a powerful way to use your wealth anywhere in the world.
For More – Candypulse
FAQ’s
1. Are Crypto Cards Accepted in India?
Crypto cards, if issued by any global exchange outside India, generally work at most merchants in India. The only catch is that these merchants must be eligible to accept payments via international cards on their Visa/Mastercard network.
However, some basic rules around international payments and conversion rates will be applicable.
2. Can crypto cards be used for international payments?
Crypto cards excel when used for making international payments. The card seamlessly converts necessary crypto into required fiat on the go. This eliminates the hassles of currency conversion while providing competitive exchange rates.
3. What happens if the crypto price changes during payment?
While making payments through crypto cards, the exchange rate is locked in at the exact moment of the transaction. This ensures the merchant receives the correct amount of fiat currency while the user pays the value of crypto measured at that instant. The change in the price of crypto will not affect the payment, as the necessary amount is already in process.
4. Where can I use a crypto card?
Crypto cards are usually integrated with Visa or Mastercard and can be accepted anywhere that accepts payments through these networks. This could include any supermarket or a local shop, online e-commerce sites, and digital services like Netflix, luxury restaurants, and hotels. However, there are a few exceptions. There are some gambling sites and financial services that may be restricted by the card issuer. Please make sure to check before applying for your preferred card.
5. Is a crypto card safe for daily use?
Crypto cards employ similar security measures to traditional cards. They are PIN protected fro physical use, offer encryption for all data exchanges, and provide a block/ freeze card feature in case of theft or misuse.
6. Are crypto cards accepted everywhere?
Crypto card providers partner with the global payment networks like Visa and Mastercard. This makes their cards acceptable to millions of merchants globally. For the merchants, it is like a traditional card payment, and so it is not a specific cryptocurrency they accept.
7. Do crypto cards charge fees?
The fees charged by the crypto cards vary greatly, as per the card issuer. However, there are some fees charged, such as a crypto conversion fee, ATM withdrawal fees, foreign transaction fees, and annual fees. It is suggested to understand all of them beforehand to avoid confusion.
8. What happens when you pay with a crypto card?
When you swipe a crypto card at a POS terminal, a request is raised by the merchant in their local fiat currency, which is received by the crypto card issuing platform. Here, the precise amount of crypto is sold to cover the payment and the conversion fee. Once the merchant receives payment in fiat currency, your crypto wallet is updated in real-time, updating the crypto deduction from your amount.