BlockFi, one of the most well-known cryptocurrency-based lenders, announced that they are planning to offer Bitcoin, instead of cashback, points, or miles, through their latest rewards credit card. This would make their product one of a kind, but also raise some serious question marks, regarding the future of credit card rewards.
How do such cards work?
For the past years, cryptocurrencies have been rapidly growing in popularity, while the latest price surges attracted even more investors, not to mention the increasing number of companies accepting it as a payment method.
However, Bitcoin rewards programs, for example, are still a mystery to many credit card users.
Let’s take BlockFi’s new credit card and see how it stacks. Simply put, for an annual fee of $200, which is surely high, compared to fees for regular rewards cards, you will receive Bitcoin rewards for each purchase you make. Considering the volatility of the digital asset, it can be luring for those who have at least some basic knowledge about cryptocurrencies.
Are Bitcoin rewards here to stay?
There’s something telling us that we will get to see a few more Bitcoin rewards credit cards in the near future. And this will be good, as competition will help driving down costs, making such cards more attractive for the large public.
Until there will be more options available, think twice about getting a Bitcoin rewards credit card. As long as you are aware of what this process involves and how cryptocurrencies work – including the chances of easily increasing the value of your rewards, but also losing almost everything – you can give it a shot. In the end, except the annual fee, there’s nothing to lose.
On the other hand, if Bitcoin and cryptocurrencies, in general, are somewhat of a new concept, you should stick to traditional rewards cards.