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Update July 30, 2021: BlockFi just announced the following future updates to its Bitcoin Rewards Card:
- Merchant partnerships with increased rewards rates
- Ability to choose other cryptos for rewards points
- Option to add authorized users
BlockFi is getting its new Bitcoin Rewards credit card into its customer’s hands as fast as they can right now. When I was moved off of the waitlist last week, I got an almost instant notification that I was approved and a note that I could expect my card in the mail in 7-10 days. The card was actually overnighted via FedEx and I had it in my hands and activated two days after I was approved.
I’m a big fan of using credit card rewards programs (which is great if you are able to pay your balances in full every month) so I pay for everything with a credit card. The introductory rewards rate on BlockFi’s Bitcoin Rewards Visa is 3.5% for the first three months beginning when you activate the card. I love the idea of accumulating Bitcoin without having to buy it directly, so this particular credit cards really appeals to me. If you’re part of the “stats stacking” crowd and use credit card reward programs, then I truly think this is one worth checking out. I’m sure we are at the onset of whole new slew of credit cards with programs that appeal to crypto fans, but for now, our options are limited. Here’s a run down of what to expect with BlockFi’s Bitcoin Rewards Visa.
How Do I Get the Card?
Although BlockFi is working to get people off of the waitlist (I thought I was pretty far down the list but was notified mid-July that I was eligible) if you haven’t yet joined the waitlist, you’ll have to do that first. Joining the waitlist is not commitment and does not result in a credit pull that affects your credit score. BlockFi will notify you when you come off the list and you will first get pre-approved, which also does not affect your credit score. You will then elect to apply for the card. BlockFi will do a hard pull on your credit to see if you qualify. You do need to have good to excellent credit to qualify for the BlockFi Bitcoin card. If you don’t have a BlockFi account, you’ll want to open one so you can manage your credit card and see your Bitcoin rewards once you do get the card.
What are the Benefits of the BlockFi Bitcoin Rewards Credit Card?
Besides the obvious Bitcoin rewards, what does the BlockFi Visa offer to its customers? As of July 2021, the BlockFi Bitcoin credit card does not carry an annual fee, fees for using the card, or international transaction fees. Fees are one of the first things I look for when I’m considering any new credit card.
There is currently a special, 90-day introductory rewards rate of 3.5%. Beginning on the day of activation, you’ll 3.5% back on every purchase you make using the card. The rewards are capped at $100 USD which is equal to about $5000 in purchases. After the initial 90 days, you can 1.5% back on every purchase. If you’re a big spender and charge over $50,000 on your Bitcoin Rewards card in a year, your rewards rate moves up to 2%.
Once your rewards are paid out to your BlockFi account (which occurs monthly), they’ll earn interest at BlockFi’s current rates, which can fluctuate. With the combination of the credit card Bitcoin rewards and interest on your Bitcoin in a BlockFi interest account, you can earn Bitcoin in a passive manner. For many, this is a much more stress-free way to invest in the volatile asset!
If you hold stablecoins in your BlockFi Interest Account, you can get a 2% APY bonus in Bitcoin on those holdings. It’s clear that BlockFi is trying to really incentivize using both the credit card and their crypto interest account services, which works to your benefit.
What are the Downsides to the Credit Card?
As with any credit card, you’ll want to keep track of your interest rate that applies to the balance you’re carrying on the BlockFi Bitcoin Rewards card. This is why I recommend paying off your balance every month. If you carry a balance and make only the minimum payments, the amount you pay in interest over the life of your card use will greatly outweigh any rewards you earn from your purchases.
My biggest gripe with this card is the fact that the Bitcoin rewards are very delayed. You won’t actually see any Bitcoin until your rewards are paid out to your BlockFi interest account which will happen sometime after month end. You actually accrue points on your purchases and each point is worth $0.01. So you are essentially accruing a dollar amount in rewards which be transferred to Bitcoin when those rewards are paid out monthly. The reason I’m not crazy about this feature is that I’d like to have a little more control over when I’m getting my hands on the actual Bitcoin. If you’ve traded crypto, you understand the importance of timing. Right now, I have rewards point on my BockFi Bitcoin card, but if Bitcoin keeps moving up until those rewards are paid, I will have a little less Bitcoin than I could have gotten today. It’s not a big deal if you’re fine with just building a little Bitcoin stash though.
My other gripe is the fact that you can make credit cards payments by linking an external traditional bank account. I wish I could use my stablecoin balance in my BlockFi account to make payments, or use stablecoins from another wallet to pay my credit card balance. I’m hopeful that in the future more payment options will become available.
How Do I Manage My Credit Card Account?
Like I mentioned earlier, you’ll need to open a BlockFi account if you want to use their credit card to earn Bitcoin. Once you have your account and your credit card, managing your credit card account is very easy. In the app, simply tap Credit Card in the bottom middle of your screen.
The only thing you can really do inside the mobile app is check on your transactions, credit card balance, and accrued rewards. If you look at the picture above, you’ll see that 347 “Bitcoin Rewards” have accrued on the initial balance of $99.26. Each point is one cent so there is currently $3.47 worth of rewards. That’s USD and won’t be transferred to actual Bitcoin until after the months ends. That $3.47 will be exchanged to Bitcoin at whatever the exchange rate is at the time BlockFi transfers the rewards to your BlockFi interest account.
To make payments on your credit card balance, you will be taken out of the app and asked to sign in on the website. The BlockFi account page is very user friendly and setting up a bank account to make payments only takes a minute. You’ll see a little more data than you do on the app. You’ll see your rewards points and the estimated amount of Bitcoin the points correspond to. This number will fluctuate as you accrue points and Bitcoin’s price moves.
Cheers to earning Bitcoin!