TL;DR
A crypto card allows you to earn rewards or instantly convert your cryptocurrencies into fiat currency to pay for goods and services. Both Mastercard and Visa issue crypto cards. You can use your cryptocurrencies in millions of locations around the world.
A prepaid crypto card is similar to a debit card in that it needs to be loaded with a cryptocurrency balance before it can be used. You can get a crypto card from a licensed issuer, such as a cryptocurrency exchange or bank. However, crypto cards are not without risks. Your funds stored on the card may still lose their market value and card transactions will likely incur fees.
Crypto credit cards work like standard credit cards, with cryptocurrency rewards. You can pay your credit card bill with fiat money, but you receive cryptocurrency bonuses on the amount spent.
Binance offers the Binance Visa Card to customers with KYC and AML verification. You can complete the sign-up process within minutes and enjoy waived administration and transaction fees, as well as receive rewards and other benefits.
Introduction
Interest in cryptocurrencies is often associated with their investment potential, but they still offer utility in terms of transferring value. Satoshi Nakamoto didn't create Bitcoin to make people billionaires. However, it was designed as a global digital payment system. One way to achieve this goal is through the use of crypto cards. It is a good option for using digital assets and crypto in everyday payments, as well as offering crypto rewards.
What is a cryptocurrency card?
A crypto card typically acts like a debit card. You can pay for items or services that your card provider accepts. It may seem like you are paying the supplier directly with digital currencies, but that is not what actually happens. The seller receives fiat money in his account and not cryptocurrencies. Your crypto card takes the cryptocurrencies in your account, converts it to your local currency, and uses that money to make the payment. We will soon explain this with an example.
Visa and MasterCard offer crypto cards with partner companies applying for a license. Visa and MasterCard are the two most used payment providers worldwide, which is why crypto cards are accepted by most retailers. Some crypto cards offer cryptocurrency rewards on money spent with the card. These are generally credit cards that require proof of credit to apply.
How does a crypto card work?
As we mentioned, a crypto card does not pay cryptocurrencies to the supplier. It converts your cryptocurrencies into cash, which you can spend on purchases using the card.
For example, imagine you have $500 worth of BNB in your Binance Card Fund Wallet. At a restaurant, you will pay the $100 bill with your crypto card. When you insert your card and agree to the payment, Binance sells $100 of your balance in BNB and sends the money (fiat currency) to the card. The restaurant receives $100 and you are left with $400 in BNB in your Fund Wallet. When using the crypto card, all this happens in a few seconds.
You can also use crypto cards for ATM withdrawals if your service provider supports this. The same method used for physical cash withdrawals.
What are the differences between a crypto card and a credit/debit card?
There are some differences between credit and debit cards and crypto cards. For the most part, they work the same way when it comes to payments. The most significant difference between a crypto card and a credit/debit card is that you load your crypto card with a cryptocurrency balance. A debit card is preloaded with fiat currencies and credit card transactions are paid later using these fiat currencies.
A prepaid crypto card works similarly to a traditional debit card. You must have the funds in your account to be able to spend them. You cannot load your cards with fiat currency, only with cryptocurrencies. When you make a payment, your funds are immediately converted to your crypto wallet.
On the other hand, Crypto credit cards use a line of credit that allows you to buy now and pay later. Gemini and BlockFi have launched crypto credit cards that offer cryptocurrency cashback. Your credit card bill must be paid in regular fiat currency, which means the crypto credit card is basically a regular credit card with rewards.
To apply for a card, you must be a customer of a company that offers a crypto card, such as a crypto exchange or a bank that supports cryptocurrencies. Just like any regular credit/debit card, before applying for your crypto card, you must complete Know Your Customer (KYC) and Anti-Money Laundering (AML) checks. In the case of a crypto credit card, you must also undergo credit verification.
What are the advantages of using a crypto card?
The main benefit of a prepaid crypto card is the ability to use your cryptocurrencies for everyday purchases. Before the crypto card, this was a traditionally difficult task as most providers do not accept payments directly in cryptocurrencies. Additionally, some currencies like Bitcoin may require 30 minutes to confirm a transaction. The price is also volatile, which means that at the end of the process, you could pay a different amount than expected.
Many crypto cards also offer benefits such as rewards (cashback) or discounts on subscriptions to services, such as Spotify or Netflix. These benefits incentivize users to use a specific provider and are similar to those offered by traditional debit/credit cards. Compare what each card offers to find the best benefits for you. Don't forget to check the fees that may be charged during the conversion process.
Do crypto cards carry any risks?
The risks of having a crypto card are the same as storing cryptocurrencies. If you have an account loaded with Bitcoin (BTC) or Ether (ETH), the fiat value of your account will constantly change. In other words, depending on exchange rates, you may not have the amount of money you imagine in your account.
It is important to remember that in many tax jurisdictions, a purchase with cryptocurrencies is a taxable event. It doesn't matter if you're spending a few dollars on a coffee or thousands of dollars on a car. If you have made gains or losses on your cryptocurrencies, before using them to buy something with your crypto card, you should consider the associated taxable value.
You can avoid this problem by purchasing stablecoins and using them with your crypto card, as their price rarely varies in relation to the pegged value.
What is Binance Card?
Binance Card is a Visa debit card associated with your Binance account. By filling your Card's Wallet with Funds, you can use cryptocurrencies anywhere that accepts the Visa card. It works in the same way as the prepaid crypto debit cards mentioned above.
Binance Card is available in which countries?
The Binance Card is only available to users from the countries below:
Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland , Portugal, Romania, Slovakia, Slovenia, Spain and Sweden.
How to apply for Binance Card
If you already have a Binance account and are a resident of an eligible country, it is very easy to get a card. If you are not yet registered with Binance, follow the Binance Guide for Beginners and open your account in just a few minutes. You will need to complete all KYC and AML verification processes before applying for the Binance Card.
To request your card, make sure you are logged into your account and visit the Binance Card page. You can also access this page by hovering over [Finance] on the Binance homepage and clicking [Binance Visa Card].
Then click [Start] and [Request Card]. Then you will see some information about KYC verification and an agreement for confirmation.
After confirmation, you will be directed to the Card Request page. Here you can choose how your name will be displayed on the card. After confirming your choice, click [Continue].
Here you will find your data already filled in and some additional information for you to fill in. Finally, agree to the Privacy Policy, Terms of Use and Cardholder Agreement and then click [Request Your Binance Card].
After requesting your card, you will have access to a virtual card, to use until you receive your physical card. You can add this card to Google Pay Send or even use it for online purchases. If you prefer, you can also request your card through the Binance app. To learn more about applying for the Binance Card, visit our Frequently Asked Questions (FAQ).
Binance Card Benefits
In addition to allowing you to spend your cryptocurrencies at VISA-accepting stores, restaurants, and vendors around the world, the Binance Card also offers exclusive perks and benefits.
1. Fee Waiver - The Binance Visa Card is free for any Binance user. There are no administrative, processing or annual fees charged by Binance. However, third-party fees may apply.
2. You can continue storing your cryptocurrencies - To make purchases, there is no need to exchange your cryptocurrencies for fiat currencies. Binance converts your coins at the time of purchase, which means your cryptos can still give you gains as the market moves.
3. Up to 8% cashback - Depending on your average monthly BNB balance, you will receive up to 8% cashback on all your purchases. The cashback amount will be distributed in BNB, directly to your Binance account. Read more details about the cashback program here.
4. Security of funds - Your crypto funds are safe (SAFU) and protected by Binance. Binance uses robust standards and offers a high level of security.
Final considerations
If you have cryptocurrencies that you no longer want to store (HODL), it can be very convenient to use a crypto card for conversion into fiat currency. Without a crypto card, you need to go through the manual process of converting and transferring fiat currency to your bank account. This process can take days, depending on the bank and cryptocurrency broker. A crypto card really is one of the fastest ways to use your cryptocurrencies for purchases. It's a very welcome feature. However, for tax inspection reasons, always make sure to keep a record of your expenses.