What is the BlockFi Credit Card and how does it work? This is a typical Visa credit card in many respects; you can use it anywhere Visa is accepted, and it has no annual fee and no overseas transaction fees.
But the real draw for those who invest or want to invest in crypto? The crypto rewards you can earn on purchases similar to frequent flyer or frequent shopper programs offered by other credit cards.
This Visa card is structured like other Visa options; it features rewards for purchases made on the card, you can earn rewards for referring others to the program, and you make a monthly payment which is a percentage of your overall account balance. The credit card charges interest on your balance, and you’ll be subject to a credit limit.
How is the BlockFi credit card different? You can choose your cashback rewards for your credit card transactions to be paid in either fiat currency or you can choose to be paid in cryptocurrency. In the past you could choose to be paid rewards in:
- PAX Gold
- Gemini Dollar
- Binance USD
- USD Coin
- Paxos Standard
- Multi-Collateral Dai
The rewards themselves have included 1.5% unlimited cash back in crypto, plus an additional 2% back for any amount spent on the card in excess of $50k.
In the past, the BlockFi Visa also offered a limited-time crypto rewards program featuring 3.5% cash back for the first 90 days of purchases with a cap on the value of $100 in cryptocurrency.
This card has also offered enhanced perks for those using the card to buy offers from BlockFi. You can earn up to 10% in crypto for these transactions. There are BlockFi rewards, but also other incentives that aren’t tied to crypto such as booking travel, lodging, and buying tickets to events.
The card has a reward points system that pays out one “cent” of cryptocurrency for each point. The actual value of your rewards will vary depending on the current price of the cryptocurrency you choose.
Some newcomers to this type of credit card might assume they can buy using the credit card as a way to transfer cryptocurrency. As in, the buyer who wants to purchase something for 10 ETH hoping they can do so using the BlockFi Visa card.
Aside from the card’s rewards being paid in cryptocurrency, this is like any other credit card. You can make purchases but you’ll pay in dollars, and you’ll pay your monthly credit card bill in dollars, too.
You can use your BlockFi crypto rewards points to buy more cryptocurrency. You may find that these reward points have no other crypto-related use, and it’s important to know that your BlockFi Rewards must be paid into a BlockFi account and you will need that account set up BEFORE you apply for the Visa.
Knowing the basic terms of the card before you apply is important if you want to make a fully informed decision about applying. It’s important to compare both interest rates and APRs on credit cards before you apply; remember that the APR is more than the interest rate alone.
An APR includes fees and other costs associated with the credit line. The APR for the BlockFi Visa ranges between over 11% and as high as nearly 22%. Compare those numbers with other credit card APRs and introductory rates for best results.
You can submit some basic information to see if you are initially approved for the card without a hard credit pull. If you choose to commit to the application process, a hard credit pull will occur which can potentially lower your FICO scores by a small amount. That slight drop in credit scores is typical with a hard credit inquiry used to approve your application.
Due to the current lack of federal regulations regarding crypto, you may find your ability to qualify for certain features of the BlockFi Visa tricky depending on where you live. For example, you cannot apply for the BlockFi Visa if you live in the state of New York.
BlockFi does not have the right license to operate in that state. Compare that to Kentucky where you can apply for and receive the card, but your rewards will be paid into a non-interest earning “BlockFi Wallet”.
Also, you may be liable for federal taxes on crypto rewards if you sell or transfer them depending on whether the sale or transfer resulted in a “taxable event”.
Joe Wallace has covered real estate and financial topics, including crypto and NFTs since 1995. His work has appeared on Veteran.com, The Pentagon Channel, ABC and many print and online publications. Joe is a 13-year veteran of the United States Air Force and a former reporter for Air Force Television News.