How to earn Bitcoin on everyday purchases
Earning cashback and points on credit cards has been popular with Canadians for years, but there’s a new card reward emerging: Bitcoin cashback.
Note: Bitcoin cashback has been removed from the MogoCard as of October 1, 2021. This post is for informational purposes only.
For some, traditional rewards cards have their benefits: when you buy something using these cards a percentage of your purchase (usually 1% or 2%) is given back to you in the form of cash or points that you can redeem on future purchases. Frequent travellers often use travel rewards programs to earn for future trips, while everyday spenders might choose to earn cashback on daily purchases to help them save money.
The drawbacks of traditional rewards
Of course, rewards cards can also have their drawbacks. They often carry annual fees in the hundreds of dollars and offer perks you might never use, or even expire if they aren’t used. Further, some travel rewards can’t be redeemed if you can’t travel.
So while earning reward points is great in some cases, the rewards you earn don’t contribute to your long-term financial future. Plus, rewards credit cards could even incentivize you to build credit card debt, which unfortunately can’t be paid off by points alone.
But there’s a new reward emerging: Bitcoin. Vancouver-based fintech company Mogo has just launched a new feature on its Mogo Visa Platinum Prepaid Card (MogoCard), which allows you to earn Bitcoin cashback on all of your daily purchases like buying a coffee or paying your bills.
The MogoCard is also a prepaid card, not a credit card. In contrast to credit cards, prepaid cards help control your spending because you can only spend the money you load onto the card. So unlike credit cards, you aren’t borrowing money to make your purchases or earn rewards.
The MogoCard allows you to earn 2% Bitcoin cashback on all purchases.
Why earn Bitcoin instead of cash?
Bitcoin, is a digital token with unique identifiers that has a monetary value. Bitcoin has recently enjoyed more mainstream popularity in the financial world and today you can even invest in an exchange-traded fund (ETF) that tracks cryptocurrency prices.
Bitcoin can be spent like cash, but also able to hold a lot of value similar to gold and is completely digital. Proponents of Bitcoin also believe it acts as a hedge against inflation, as there is a finite amount of Bitcoin available by design. The price of Bitcoin has risen dramatically over the past year, but it has also seen significant fluctuations over the course of its short life, meaning that investors still need to understand its risks.
Earning Bitcoin instead of cash can help give you exposure to a new asset class and also diversify your savings. Since prepaid Visa cards such as the MogoCard can be used anywhere Visa is accepted, earning Bitcoin cashback instead of traditional rewards is easy.
There’s also a benefit of earning Bitcoin on everyday purchases from an investment perspective. Investing small amounts in Bitcoin over longer periods of time instead of making one large investment helps reduce your risk to value fluctuations since Bitcoin is a speculative asset. The MogoCard is a good choice for someone looking to invest in Bitcoin but don’t have capital to do so.
How to sign up
Signing up for the MogoCard is quick and can be done online. To get started, create a Mogo account and profile, agree to the terms and conditions and complete the Equifax Identity Verification questions. Once you’ve created an account, you can then order the MogoCard.
Once you start spending on the MogoCard you’ll start earning Bitcoin rewards, which will be deposited automatically into your Mogo Bitcoin & Rewards account.
Other features of the MogoCard
There are no monthly fees associated with the MogoCard, but if you use it at an ATM to withdraw money you’ll be charged a $1.50 fee in Canada and $3.00 fee abroad. You’ll also get notifications that show you how much you’ve spent and how much Bitcoin you’ve earned on every purchase. Being able to see your BTC grow and shrink is a great first step into crypto investing. For some investors, taking the first leap into crypto can be intimidating at first and this is a way to get involved with minimal risk.
In addition to earning unlimited 2% Bitcoin cashback on all of your MogoCard purchases, for every dollar you spend with your MogoCard, Mogo offsets a pound of CO2 on your behalf.
Your Bitcoin cashback gets deposited into your Mogo Bitcoin & Rewards account, which is a free way to buy and sell Bitcoin. With Mogo Bitcoin & Rewards your account is managed by Mogo on your behalf and 95% of your asset is securely stored offline in “cold storage”. You’ll also receive an annual statement of your Bitcoin investment income with Mogo for tax reporting purposes to Revenue Canada.
In addition to buying and selling Bitcoin, you can also earn Bitcoin cashback with Mogo Bitcoin & Rewards. You’ll get 0.5% Bitcoin cashback on your total Bitcoin trade amount, if your total trade amount exceeds $10,000 in any given month.
While you can’t actually buy things directly using Bitcoin with your MogoCard (since your accumulated Bitcoin rewards are deposited in a separate account), you can continue to build up your Bitcoin savings with Mogo or sell your Bitcoin and withdraw your funds in Canadian dollars any time you want.
While traditional rewards credit cards are still popular with Canadians, they might not offer you the best value or set you up for long-term financial success. Using a prepaid card and earning Bitcoin could be a smart and unique alternative reward for you. Plus, earning Bitcoin on everyday purchases is a beginner-friendly, low-risk way to get into the world of cryptocurrency and is an interesting twist on the idea of earning cashback rewards.
The MogoCard is an easy way for you to earn Bitcoin on everyday purchases, stay on top of your debt and offset your carbon footprint. Watch the video below for more.