The 101 on bitcoin debit and credit cards
A bitcoin debit card is a debit card linked to your cryptocurrency balance. These cards aim to make it quick and easy to spend your crypto coins in the real world, allowing you to pay with digital currency anywhere that regular debit and credit cards are accepted and to use your crypto balance to withdraw cash at an ATM. There are several crypto-friendly stores, retailers and ATMs in Australia where you can use your bitcoin debit card.
How they work is actually quite simple:
- Prepaid cards allow you to load your card with coins from your crypto wallet, which are automatically converted into your fiat currency of choice (ie Australian dollars) so that you have an AUD balance on your card ready to spend.
- Non-prepaid cards are linked to your bitcoin wallet so that whenever you swipe them at a payment terminal or enter your card details to make an online payment, the card provider converts your digital coins into fiat currency at the current exchange rate to complete the transaction.
Crypto debit cards usually run on existing card networks like Visa, Mastercard or EFTPOS and can be used anywhere in the world where those cards are accepted. Bitcoin is far and away the most widely supported cryptocurrency across debit card providers, but some providers around the world also allow you to load your card using other currencies, such as Ethereum and Litecoin.
Finally, make sure you’re aware that cryptocurrency debit cards come in two forms:
- Physical cards that you can carry around in your wallet, swipe at payment terminals and use at ATMs
- Virtual cards that allow you to enter your card details for online purchases
How would I use a bitcoin debit card?
Buying a GoPro with cryptocurrencyJim wants to buy a new GoPro camera from his local electronics store. But thanks to a spate of unexpected bills, Jim is a little short of cash at the moment and doesn’t have the $500 necessary to complete the purchase.
However, Jim does have a crypto wallet where he is storing 5.43 BTC, so he decides to buy the camera with some of his bitcoin balance. He decides the easiest way to do that is to use a bitcoin debit card. How does he go about doing this?
Jim signs up for a physical bitcoin debit card that allows him to convert his BTC into AUD and pay at any EFTPOS terminal around the country. Once his card arrives, Jim uses the card provider’s app to load 0.2 BTC onto his card. The provider converts his BTC into AUD, leaving Jim with a balance of just under $2,000 on his card.
Jim then uses the card to pay for his GoPro at the local electronics store. All he has to do is swipe the card at the EFTPOS payment terminal and enter his PIN.