With cryptocurrency taking the world by storm, it’s no surprise that credit card companies are looking at ways to integrate crypto payments into everyday life. This led to the launch of the crypto rewards credit card which strengthens the partnerships between credit card companies and cryptocurrency exchanges.
While these products are still in their early stages with plenty of kinks yet to work out, they show promise and present an opportunity to introduce crypto to the masses by piggybacking on existing financial systems. Here’s how you can redeem your points in crypto using a credit card.
Convert into Cash
With hundreds of dollars worth of points and miles sitting dormant, it’s time to look at how you can cash them in for tangible rewards. Most credit card reward programs will let you exchange your points for gift cards or other cash equivalents. Some of these are pretty good deals. For example, if you’re looking to buy an Xbox One X — which costs $500 — Microsoft sells 12,000 points for $60 on its website. Not bad.
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Exchange for Bitcoin or Other Cryptocurrencies
Certain credit cards allow you to exchange your rewards points for cryptocurrency. However, most of these offerings come with significant fees and limits on what coins you can buy. Your best bet is to use a site like Coinmama or Changelly, which are crypto-to-crypto exchanges where you pay with your credit card and receive digital currency in return. Just note that crypto exchanges charge their own transaction fees as well. According to SoFi Invest, “The SoFi Credit Card now lets you redeem points straight into crypto. You’ll earn 2% cashback on all purchases and can redeem it directly into crypto with your SoFi active invest account.”
Why Not Both? Use Your Cryptocurrency and Traditional Credit Card Together
Use your card and convert your rewards into a cryptocurrency. This is an excellent strategy to ensure that you do not fall behind while waiting for large, less liquid cryptocurrencies like Bitcoin to appreciate enough to sell at full value. Keep an eye on your favorite altcoins before deciding which type of currency to hold as an investment. For example, if you are thinking about buying Ethereum, one good strategy would be to use credit card points (or cash) to purchase Ethereum with USD.
Once you sign up for a crypto rewards credit card, every purchase you make will earn an additional 10% cashback on all of your purchases. This pays out as points that you can redeem on any future transactions. The points do not expire, and there is no limit to how many you can earn.
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HODL on your Own Wallet
The easiest way to redeem credit card rewards for crypto is to own your own wallet and transfer your points or miles directly. That way, you control when you get crypto — and how much. The downside is that it takes extra time, forethought, and effort on your part.
Don’t wait too long if you’re interested in using your credit card to redeem for crypto. The last thing you want is to have all of your points or miles saved up and then find out that they expire before you can use them.
