Bitcoin debit cards are a relatively new phenomenon in the Bitcoin world with the first brought out at the end of 2014. Although called bitcoin debit cards they are actually prepaid cards which means your bitcoin is converted into your currency of choice and stored on the card. Some in the community think they are quite controversial as they can charge large fees whilst some see them as a benefit as it makes the process of using your bitcoin at any store that one step easier, instead of waiting for the store to accept bitcoin.
The are a number of bitcoin debit cards on the market that are synced into either their own wallets, such as E-Coin, or to exchange systems such as the Shift Card with Coinbase. Most of these allow you to instantly top up your debit card from your bitcoin wallet and mobile apps are available to make it easier to do so. It’s becoming increasingly easier to get your bitcoin into a card that you can use anywhere.
There are virtual versions of the cards which are usually cheaper, but they come with stricter limits. On the upside these cards with financial limits have much lower sign up requirements. If you want a full on card with limits you generally have to show your an ID card or passport and utility bill.
Most card providers are subject to the jurisdictional restrictions. For example the majority of cards cannot be used in the United States due to their strict state by state regulations. The Shift card at the time of writing can be used in over 30 states. Where a card can be used is subject to change as fees from the card providers are too.
Card Cost & Activation Fees: Some cards are free but there are instances of some providers charging up to $100 for cards with personalized features. Generally the prices are about $10-20 but some providers add on extra for activation fees that are simply just an extra cost.
Loading Fees: Card providers can charge a loading fee for moving your bitcoins to USD that is above the exchange rate that they offer. These can depend on how much you are loading the card but generally they are 1%, if any at all, with some as high as 2% for anything over $1000 or whatever currency the card is denominated in.
ATM Fees: ATM fees vary on where you are using the card. For example using a GBP denominated card in the UK could have a fee of £1.75 GBP but a fee of £2.25 if you use it abroad. There are also various other costs that some providers add on to their offerings such as a fee for checking your balance and a fee for changing your pin. Some providers charge a percentage based on how much you withdraw above a certain limit.
Currency Conversion Fees: If you use our card to pay for something in GBP when your card is denominated in USD the card provider charges an extra fee above the price. These usually range from 1% to 4.5% with the average at 3%.
Point of Sale Fees: The Point of Sale, POS, fees vary and can be a percentage of spend or a simple flat fee. So if you are using a your card to buy a can of coke at $1 you could be charged $3 if there is a $2 surcharge.
Monthly Fees: Some card provide monthly or annualized fees for using their service and some don’t. These are often waived for a year or six months.
Extra Fees: There are a variety of other fees that come with the cards such as an inactivity fees. These are levied as a form of tax for not using your card and can be as high as $10 per month. There are other fees too so make sure you check the fine print from the card provider.
Bitcoin debit cards are all relatively similar and apart from competing on ATM fees or PoS fees. One major differentiation that they offer is their rewards – just like in the traditional credit card industry with Air Miles or discounted partnership offers.
Some cards give you rewards for making transactions. For example WageCan offers a rebate in bitcoin for every dollar that you spend. Other cards such as Plutus are offering reward points in their own cryptocurrency called plutons which will be exchangeable for various services or goods.
Choosing a Card
One of the best places to choose a bitcoin Debit card is to head over to CryptoCompare where they have ranked all the cards and added some metrics for you to work out whether the card is good value or not. Their overall fee makes certain assumptions on how often you use an ATM or Point of Sale and works out how much you would have lost if you had £1000 or $1000 on the card so you can compare all the cards in the currency they are denominated.
You can also compare cards by their cost, level of anonymity, monthly fee, initial set up cost that includes activation fees, and you can see reviews and add your own reviews to help others make a better decision.
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