BlockFi Unveils First Credit Card to Offer Bitcoin Rewards
Cardholders will earn cryptocurrency on each purchase instead of points or miles
Cryptocurrency platform BlockFi unveiled the first credit card to offer Bitcoin rewards Tuesday, giving consumers a way to earn the cryptocurrency instead of points or airline miles on every purchase.
The BlockFi Bitcoin Rewards Credit Card, available next year, will function much like a traditional cash-back rewards card. Once approved, cardholders will have a credit limit they can spend against to earn 1.5% cash back on every purchase, all in U.S. dollars. Then, unlike typical credit cards, BlockFi will convert that cash back into Bitcoin and place it in the cardholders’ BlockFi Interest Accounts each month. Those accounts are like high-interest savings accounts for Bitcoin and other cryptocurrencies.
BlockFi, aiming to make Bitcoin more popular, joins companies such as PayPal in nudging cryptocurrency further into the mainstream. In November PayPal announced that all PayPal account holders can buy, hold, and sell cryptocurrency with PayPal. Bitcoin in particular is having a resurgence among investors during the pandemic. The digital currency reached an all-time high price on Monday, according to cryptocurrency index site CoinDesk.
Cardholders who spend $3,000 within three months of opening the new BlockFi Bitcoin card will also earn $250 back in Bitcoin. That’s a comparable bonus to other cash-back rewards card offers available right now (in dollars), but an above-average spending requirement.
The cryptocurrency lender hasn’t disclosed many precise terms for the BlockFi rewards card yet, but did note that the card is a Visa that will come with a $200 annual fee. That’s steep considering many other credit cards that offer a similar rewards-earning rate don’t charge annual fees at all.
However, consumers who want to dive into the world of Bitcoin may find the convenience of earning the currency as rewards rather than buying it separately worth the ongoing cost. Buying Bitcoin often comes with additional transaction fees, depending on how the cryptocurrency is purchased and variables such as the market transaction volume on any given day. A BlockFi Interest Account currently earns 3%-6% APR on Bitcoin deposits, which may also help defray the cost of the card’s annual fee.
The BlockFi Bitcoin Rewards Credit Card will launch in the spring of 2021, according to BlockFi, but will only be available to U.S. residents. For now, those with a funded BlockFi Interest Account can join a waitlist for the new credit card. The waitlist will open to the general public in January 2021.