Crypto is unregulated in the UK; there's no consumer protection; value can rise or fall; tax on profits may apply*.
Compare crypto debit cards
How to choose a crypto debit card so you can shop with your cryptocurrency.
Don't invest unless you're prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.
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Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.
What are the key risks?
1. You could lose all the money you invest
- The performance of most cryptoassets can be highly volatile, with their value dropping as quickly as it can rise. You should be prepared to lose all the money you invest in cryptoassets.
- The cryptoasset market is largely unregulated. There is a risk of losing money or any cryptoassets you purchase due to risks such as cyber-attacks, financial crime and firm failure.
2. You should not expect to be protected if something goes wrong
- The Financial Services Compensation Scheme (FSCS) doesn't protect this type of investment because it's not a 'specified investment' under the UK regulatory regime – in other words, this type of investment isn't recognised as the sort of investment that the FSCS can protect. Learn more by using the FSCS investment protection checker.
- The Financial Ombudsman Service (FOS) will not be able to consider complaints related to this firm or Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA regulated firm, FOS may be able to consider it. Learn more about FOS protection here.
3. You may not be able to sell your investment when you want to
- There is no guarantee that investments in cryptoassets can be easily sold at any given time. The ability to sell a cryptoasset depends on various factors, including the supply and demand in the market at that time.
- Operational failings such as technology outages, cyber-attacks and comingling of funds could cause unwanted delay and you may be unable to sell your cryptoassets at the time you want.
4. Cryptoasset investments can be complex
- Investments in cryptoassets can be complex, making it difficult to understand the risks associated with the investment.
- You should do your own research before investing. If something sounds too good to be true, it probably is.
5. Don't put all your eggs in one basket
- Putting all your money into a single type of investment is risky. Spreading your money across different investments makes you less dependent on any one to do well.
- A good rule of thumb is not to invest more than 10% of your money in high-risk investments.
If you are interested in learning more about how to protect yourself, visit the FCA's website here.
For further information about cryptoassets, visit the FCA's website here.
Crypto debit cards are helping to bridge the gap between cryptocurrency and the real world. Crypto cards look and work the same as any other Visa or Mastercard, but they link back to your cryptocurrency balance. Their aim is to make it quick and easy to spend your crypto coins out and about. But they also offer the opportunity to earn yourself some rewards with your spending.
With an increasing number of cards now available in the UK, this guide takes a closer look at how cryptocurrency debit cards work – and how you can compare the options to find the card that’s right for you.
Compare Bitcoin debit cards at a glance
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Looking to load your crypto card? Check out our guide to crypto exchanges.
How do Bitcoin debit and credit cards work?
A crypto debit card or Bitcoin debit card is a debit card linked to our 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.
Crypto debit cards usually run on existing card networks like Visa or Mastercard, and can be used anywhere where those cards are accepted. Bitcoin is far and away the most widely supported cryptocurrency across debit card providers, but some providers also allow you to load your card with other currencies, such as Ethereum and Litecoin.
How they work is actually quite simple:
- Prepaid cards. These allow you to load your card with coins from your crypto wallet, which are automatically converted to your fiat currency of choice (British pound) so that you have a GBP balance on your card ready to spend.
- Non-prepaid cards. This type of crypto card is linked to your crypto wallet. This means 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.
The big difference between prepaid and non-prepaid crypto cards is what point your fiat is converted to crypto coins. As the crypto market can be quite volatile, it’s important to understand at what point in the transaction process will your currency be converted – and at what exchange rate.
Crypto cards can also come in two forms. Physical cards that you can carry around in your wallet, swipe at payment terminals and use at ATMs. Or virtual cards that allow you to enter your card details for online purchases.
How much do they cost?
It’s important to understand the costs when it comes to crypto debit cards, as there are several different fees involved.
| Cost | What is it? |
|---|---|
| Card issuance cost | Most crypto card providers charge a card issuance fee for ordering, delivering and activating your card. Prices can vary, so it’s worth comparing costs. |
| Loading fees | You’ll find that many providers charge a fee when you load your card with crypto coins or tokens. This can either be a flat fee or a percentage of your transaction amount. |
| Monthly service fee | Some providers charge a monthly service fee for use of the card. This fee is generally minimal (around £1-2) but make sure you include it in your calculations. |
| Annual fee | Rather than a monthly fee, you may find that your provider charges an annual fee to all cardholders. |
| Exchange fee | The exchange fee – or currency conversion fee – is how much you are charged for converting crypto into fiat currency or converting one fiat currency into another or converting one cryptocurrency to another. You could be charged a flat amount or a fee calculated as a percentage of the transaction. |
| ATM withdrawal fee | This is how much it will cost you to make an ATM withdrawal with your card. The fee may vary if you are using your card abroad. |
| International transaction fee | Check what fee the provider will charge you for international transactions on your card. Fees of 3% are not uncommon. |
| Inactivity fee | You may find that some providers will charge a fee if your card is inactive for a specified period of time. |
| Third-party fees | Additional fees may also be charged at the point of sale, usually by whichever merchant is accepting the card. Depending on your country and the type of purchase, this will often be around 1.5% to 3% to cover the portion of profits taken by Visa, Mastercard or other payment networks. |
Can I earn rewards with my crypto debit card?
Lots of crypto cards or Bitcoin debit cards give you the opportunity to earn rewards on your card spending. These rewards come in many different forms:
- Cashback. Some crypto cards will allow you to earn cashback in the form of regular money or cryptocurrencies.
- Redemptions. This type of reward means that you can earn yourself a redemption towards things like TV subscription services, hotel bookings or air miles.
- Travel benefits. Much like reward credit cards, you will find that some crypto debit cards open the door to travel benefits like airport lounge access.
Can I use my crypto debit card abroad?
Many crypto debit cards support multiple currencies, so they are handy if you travel a lot and want to use your card abroad. There are just a few things to keep in mind.
- Supported currencies. Check which fiat currencies the card supports, as this will impact where you can use the card.
- Geographical restrictions. Some cards will have geographical restrictions, such as they can only be used in Europe.
- Fees. Make sure you understand the costs involved in using your card abroad. You will typically find that you are charged an international transaction fee, as well as an international ATM withdrawal fee.
What are the benefits and risks of having a crypto debit card?
If you’re considering getting a cryptocurrency debit card, make sure you consider the pros and cons first.
Benefits of Bitcoin debit cards
- Convenience. They provide access to your crypto coins and allow you to spend your cryptocurrency in the real world.
- Conversion. Crypto cards are a quick and easy way to convert your crypto into fiat currency.
- Rewards. Depending on the card you choose, you stand to receive rewards on your spending. You may be able to earn crypto cashback or have exclusive member benefits like airport lounge access – much like reward credit cards.
- Exchange rates. If you opt for a prepaid crypto card, then you can convert your crypto into fiat straight away. The advantage to this comes if you monitor exchange rates and make the conversion when the rate is more favourable.
Risks of Bitcoin debit cards
- Rates & fees. These vary between cards but can significantly increase costs when spending Bitcoin or other crypto coins.
- Limited options. There aren’t that many cards available in the UK just yet, so there are limited options.
- Regulatory uncertainty. Some banks and payment networks have imposed restrictions on these types of cards, so you may find that the card is not accepted by some retailers.
- Centralisation. You need to entrust control of your digital currency to a third party.
- Tax liability. As each time you use your crypto debit card you are selling your crypto, you could be liable for capital gains tax.
- Volatility. The cryptocurrency market is highly volatile, so make sure you understand the risks before committing your money to crypto.
If you’d like to sign up for a Bitcoin debit card and spend your crypto on everyday purchases, compare the available cards in the comparison table above to get started.
Frequently asked questions
*Cryptocurrencies aren't regulated in the UK and there's no protection from the Financial Ombudsman or the Financial Services Compensation Scheme. Your capital is at risk. Capital gains tax on profits may apply.
Cryptocurrencies are speculative and investing in them involves significant risks - they're highly volatile, vulnerable to hacking and sensitive to secondary activity. The value of investments can fall as well as rise and you may get back less than you invested. Past performance is no guarantee of future results. This content shouldn't be interpreted as a recommendation to invest. Before you invest, you should get advice and decide whether the potential return outweighs the risks. Finder, or the author, may have holdings in the cryptocurrencies discussed.
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