Else Beekman
Let’s face it, cryptocurrencies are no longer assets for solely long-term holding but a full-fledged financial tool you can use for daily expenses, staking, lending, borrowing, etc. Also in Spain, especially in cities like Barcelona and Madrid where the adoption of digital currencies is rapidly growing, the daily use of crypto is gaining significant ground.
A crypto card with cashback has gained the most popularity lately, becoming a common tool for modern crypto users. Let’s grasp the main categories of crypto cards, that is, crypto credit cards and crypto debit cards.
Crypto credit cards operate similarly to traditional credit bank cards, allowing you to buy things with borrowed money against the limit the bank has set. The difference is that with the crypto credit card, you earn crypto rewards, which you accumulate and thus grow your investments over time. Credit score impact and interest rates are the factors included in this concept, too.
On the other hand, we have a crypto debit card, usually a prepaid tool, that is connected to your crypto wallet. Cryptic debit cards may use different assets, with the most popular being BTC, ETH, and USDT. Unlike credit cards, users don’t use the borrowed money, but the funds they load onto their debit card beforehand. This approach promotes spending discipline and eliminates the risk of going into debt.
Crypto cards are usually backed by such financial giants as Mastercard and Visa, both widely accepted across Europe, including in Spain’s vibrant crypto-friendly cities like Barcelona and Madrid. Both types of cards are connecting traditional finances with crypto; however, suitable for different user financial habits.
Cryptocurrency ownership in Spain doubles since 2022
Rewards and benefits included
Typically, crypto credit cards offer more lucrative rewards, cashback, and perks, up to 5% of cashback in popular crypto (BTC or altcoins). The more you spend, the more you earn. It motivates high-frequency spenders to accumulate digital assets passively by making daily purchases with a credit card.
Crypto debit cards usually offer lower rewards; however, some of them propose up to 10% cashback on daily spending. If your goal is spending, not chasing rewards, then debit cards will be a reliable option for you.
Related fees and costs
When dealing with a crypto credit card, one should consider the variety of costs and payments associated with this payment method. That may be:
- annual commissions;
- charges on unpaid balance;
- penalties for late payment;
- fees coming with foreign transactions.
Be careful, if you don’t pay the balance in full every month, the costs may eat into any bonuses you accumulate.
With debit crypto cards, things are way easier, typically, they involve fewer fees and charges. Just check if a card provider charges card maintenance fees or a monthly charge. If you are a traveller or often buy things abroad, especially in popular European destinations like Spain, check the fee structure before applying for a card, this will ensure smarter financial management over time.
Debt management as the key differentiator
Crypto credit card users essentially borrow funds and then repay their balance. That is, even if your wallet balance is low, you can make a large purchase using borrowed funds. This gives users financial flexibility and time to reorganise their holdings.
Timely repayments can positively affect the user’s credit score; however, spending the borrowed money may also impose high risks when the market is volatile and moves down.
For debit card users, there’s no concept of debt, so no danger of high interest charges and late debt repayment. However, with these limitations, debit cards offer lower financial flexibility compared with credit cards. This is particularly useful for users in Spain, where crypto regulations are evolving, but everyday use in markets, restaurants, and events is steadily growing.
For those chasing rewards and bonuses, and who are ready for high responsibility, crypto credit cards will be the best option. For those who value tight control and spending discipline, the better choice would be a secure debit crypto card with cashback.
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