How Do Bitcoin Credit and Debit Cards Work

Bitcoin with wallet and credit card

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A Bitcoin is a digital token, a type of currency, that can be sent electronically from one person to another. Like dollars, Bitcoin can be used to complete everyday transactions, as long as the person or business accepts Bitcoin as a payment method. If you have Bitcoin and want to use it for everyday transactions, you might consider a Bitcoin debit or credit card. This way you could swipe your card and complete the transaction with Bitcoin you have in your wallet. 


The price of a single Bitcoin fluctuates often, sometimes even from second to second, based on market bidding (similar to stocks, gold, and foreign currencies). Bitcoin topped $19,000 in December 2017, only to plunge to $7,200 by February 2018. What makes Bitcoin unique is that the Bitcoin network––where Bitcoins are transferred––isn’t controlled by any person or company, but rather by a decentralized network of computers. A record of all Bitcoin transactions is stored on the computers of every person who helps verify Bitcoin transactions.

Bitcoins are stored in a digital wallet that has a unique ID. To send Bitcoin to another user, that person must send you a unique address generated by the currency exchange platform (e.g. Coinbase, Square, etc.) You’d then copy the address into your Bitcoin exchange platform, enter the amount, and press send. It takes about an hour for a Bitcoin transfer to complete.

How Bitcoin Debit Cards Work

Here’s how Bitcoin debit cards work. First, you’ll need to open a Bitcoin wallet. Connect your Bitcoin debit card to your Bitcoin wallet. Then, you can use your credit card anywhere that networks cards are accepted. For example, if you have a Visa Bitcoin debit card, you can use it anywhere Visa credit and debit cards are accepted. Backed by a major processing network would give purchases the same zero fraud liability as regular credit card purchases when the card is used as credit.

There may be fees associated with Bitcoin debit cards similar to what you’d pay with a prepaid card. For example, you may pay withdrawal, transaction, or monthly account fees with a Bitcoin debit card. Keep in mind also, that since the price of Bitcoin fluctuates, the amount of Bitcoin needed to complete a transaction can fluctuate, even within a single day.

It’s important to keep track of the amount of currency you have in your Bitcoin wallet in Bitcoin and in U.S. Dollars so you know whether you have enough to complete the transaction. Carrying a backup payment method is a good idea as well in case the merchant doesn’t accept Bitcoin debit card or you don’t have enough funds to complete your transaction.

Unfortunately, Bitcoin debit cards may be shortlived. Earlier in 2018, Visa told BitPay, one of the most popular Bitcoin debit card to close its accounts. Other crypto debit card cards have also closed and are returning funds to consumers. Bitcoin debit and credit cards available in other countries may not be available in the United States. Finding a Bitcoin debit card may be more difficult, especially considering the Bitcoin is currently unregulated by Federal agencies.

The Future of Bitcoin Credit Cards

While there are limited options for Bitcoin debit cards, there currently no Bitcoin credit cards. U.S. credit cards only allow purchases in U.S. dollars. If you wanted to pay your credit card bill with Bitcoin, you’d have to convert the Bitcoin to U.S. Dollars by transferring to your checking account. The ability to purchase Bitcoin with a credit card is also limited since many major credit card issuers and banks have banned cryptocurrency purchases.

Bitcoin credit cards may be a possibility in the future as credit card companies work to figure out how to work with the currency. MasterCard recently filed a new patent that could allow Bitcoin transactions on credit cards. As of now, it’s just a patent and there has been no official news about bitcoin-enabled transactions. American Express has also filed a patent for using blockchain in its proof of payment system. Blockchain is the technology on which Bitcoin transactions are managed and recorded.

The first Bitcoin rewards credit card––Blockrize––may not be too far away. A 25-year-old entrepreneur based in San Francisco is working on a credit card that offers cryptocurrency as a signup bonus for new cardholders similar to how other credit cards offer points or miles as a signup bonus. The card, which still doesn’t have a banking partner would pay 1% cryptocurrency rewards similar to how other rewards credit cards pay 1% cash back. There are more than 5,000 people on the waitlist, according to the card’s signup page.