Despite the recent volatility, cryptocurrencies remain very popular especially among the younger generation. There continues to be an interest from people used to fiat currencies but looking for ways to get involved with crypto. Alternatively, those who’ve already started using cryptocurrencies may want a way to earn more while still using traditional currencies. In either case, the BlockFi credit card is an option that is worth considering. This article provides an overview of the card, what it offers, and the pros and cons of signing up for it.
What Is the BlockFi Credit Card?
The BlockFi credit card is a cryptocurrency-oriented card that completely transforms the rewards systems attached to older cards. Where you may previously have earned travel points or cash-back rewards with your credit card, the BlockFi Credit Card option earns you Bitcoin rewards in exchange for your spending of traditional fiat currency. Each eligible BlockFi credit card transaction earns its user 1.5% of the transaction’s value in Bitcoin. This percentage increases to 2% if the card user goes beyond the $50,000 annual spending threshold.
As the name suggests, the card is supported by the cryptocurrency wallet service BlockFi. It’s powered by fintech company Deserve and is currently issued solely by Evolve Bank & Trust. In essence, the BlockFi credit card works in the same way as a traditional credit card, with the main difference being the types of rewards you earn for use. The card comes with a regular APR of between 14.99% and 24.99%. There are no annual fees or international usage fees attached to the card.
You can check to see if you meet the requirements to apply for a BlockFi credit card by using the service’s main website. This preliminary check does not affect your credit score, but simply examines whether you’d receive pre-approval for the card.
- You must be a U.S. citizen.
- Applicants must live in a qualified state. Currently, New York is excluded from this list of qualified states.
- You must have a BlockFi wallet account to link to the credit card.
- Your credit score must be either “Good” or “Excellent” (generally credit scores ranging from 675 and higher are considered good)
Currently, there is no business version of the card available. However, users will be happy to know that they can use their BlockFi credit card at any location that accepts Visa. The card also has no foreign transaction fees attached to it.
What are the Pros of the BlockFi Credit Card?
Bonus Offer for New Cardholders
While the card comes with a standard Bitcoin reward rate of 1.5%, new cardholders receive a boosted rate of 3.5% for their first three months. If you’re able to responsibly spend a large amount during your early ownership of the card, you may be able to amass substantial Bitcoin rewards before the standard 1.5% rate kicks in. However, this rate is capped at $100 in Bitcoin before it reverts to the 1.5% rate.
Of course, you can also spend above the $50,000 threshold to access a 2% reward rate.
No Caps on Rewards
As long as you’re able to repay what you borrow, the BlockFi credit card places no caps on your rewards. This lack of a cap means you can earn as much Bitcoin as you can afford to spend traditional fiat currency. As bitcoin has generally increased in value over the long run, savvy investors may be able to use this lack of a rewards cap to amass more of the currency, with later increases in value acting in their favor.
BlockFi Trading Benefits
In addition to being a cryptocurrency wallet, BlockFi offers trading facilities to its users. If you have a BlockFi credit card, you can unlock a trading bonus where you receive 0.25% in Bitcoin back on all eligible trades. This bonus maxes out at $500 in Bitcoin per month. However, it’s a useful bonus that could bolster your cryptocurrency trading activity.
The BlockFi credit card isn’t perfect. There are several drawbacks to consider before you apply. Chief among these is the fact that while offering Bitcoin as a reward is a novel way to introduce people to the cryptocurrency, or to reward those who are already exploring it, the rewards are inflexible. While cardholders have the option of changing their reward cryptocurrency – meaning they can switch from Bitcoin to several other types of crypto – that’s where flexibility ends. You can’t choose a reward that’s unrelated to cryptocurrency without applying for a new card.
A Solid Credit Card Option
While the BlockFi credit card has a novel value proposition, it’s difficult to determine if its unique take on credit card rewards is beneficial to the end-user. In terms of pure percentages, the dollar amounts offered for rewards are no better than the cashback rewards offered for many traditional credit cards.
However, for consumers that have a long term belief that the value of Bitcoin will increase, the rewards offered by the card will be compelling.