The current status and user guide for the development of crypto cards in 2024

The New Trend in Digital Asset Spending

In the current digital financial environment, crypto cards are gradually becoming mainstream payment tools. The core value of these cards lies in eliminating the cumbersome steps of manually converting digital assets during transactions, enabling direct crypto-to-fiat conversion at POS terminals. According to market data from Proficient Market Insights, the global crypto card market is expected to expand at a CAGR of 8.8% from 2024 to 2031. The user base growth is also significant—last year, crypto card users increased by 150%, clearly reflecting the market’s growth momentum.

Key factors driving this growth include: convenience (no manual exchange needed), attractive cashback incentives (some products offer up to 8%), relatively low fee structures, and broad global acceptance. For consumers, this means they can use digital assets just like traditional bank cards and earn crypto rewards in daily spending.

Basic Classifications and Working Mechanisms of Crypto Cards

Two Main Modes

Debit Card Mode
Users spend crypto assets directly from their accounts. When a transaction occurs, the card provider instantly converts the assets, exchanging the user-specified cryptocurrency at the current rate for local fiat currency. This mode corresponds to traditional debit card functions—spending funds directly from the account.

Credit Card Mode
These cards allow users to settle bills in fiat currency while earning rewards in crypto assets. Unlike traditional credit cards, rewards are accumulated in cryptocurrencies (such as Bitcoin or Ethereum) rather than points. This mechanism is attractive for users looking to gradually increase their crypto holdings through daily spending.

Usage Process

The basic process is: deposit crypto assets into the linked wallet → select the currency for spending → complete the transaction → system automatically handles the exchange. Many products also offer cashback or points mechanisms on top of this, allowing users to earn additional digital asset income during spending.

Core Attraction Factors of the Crypto Card Market

1. Ease of Operation

Users do not need to manually perform multi-step exchanges on professional trading platforms; they can directly use crypto assets at any merchant accepting Visa or Mastercard, covering scenarios from online shopping to ATM withdrawals.

2. Reward Mechanisms

Mainstream products in the market typically offer cashback ranging from 1% to 8%. These cashback rewards are credited in cryptocurrencies, which have potential for appreciation. If the value of the rewarded crypto increases, the actual cashback yield also rises.

3. Fee Structure

Compared to traditional cross-border payments, crypto cards often demonstrate better fee performance:

• Most products have no annual fee
• Exchange fees are usually between 1%-2%
• ATM withdrawal fees are often $1-$2 or equivalent
• Some cards waive annual fees under certain spending thresholds

4. Security Measures

Modern crypto cards adopt 256-bit encryption, real-time fraud monitoring, instant transaction notifications, and secondary authentication for multiple protections. Users can freeze their cards immediately upon detecting suspicious activity, maximizing asset security.

5. Asset Diversity

Most mainstream products support over a dozen or more cryptocurrencies, allowing users to choose spending currencies flexibly based on their holdings, effectively enabling diversified investment portfolios.

6. Global Compatibility

Partnerships with international payment networks (Visa/Mastercard) ensure these cards are accepted at over ten million merchants worldwide, making them useful for both cross-border travel and local spending.

Comparison Framework of Major Market Products

In-Depth Selection Guide

Key Evaluation Dimensions

1. Asset Support Range
First, confirm whether the card supports your main crypto holdings. This impacts convenience and actual usage frequency. If your holdings are concentrated in a specific coin that the card does not support for direct spending, conversion costs will increase significantly.

2. Fee Transparency Analysis
Different products have vastly different fee structures. Need to compare item by item:

• Card issuance fee: from free to $30
• Annual maintenance fee: from free to €10
• Transaction fees: typically 0%-2%
• Cross-border spending fee: 1%-3%
• ATM withdrawal fee: $1-$2.5 or proportional
• Inactive account fee: some products charge this

The total actual cost depends heavily on individual usage patterns. High-frequency cross-border users and low-frequency ATM users will have different optimal choices.

3. Cashback and Reward Mechanisms
Distinguish between:

• Fixed cashback (e.g., all spending earns 3%)
• Tiered cashback (unlock higher cashback tiers)
• Periodic cashback (dependent on partners and time windows)

For users seeking high returns, also evaluate the cost of locking tokens to unlock higher cashback rates—this can be a hidden barrier to entry.

4. Hidden Cost Identification
Many products claiming “low fees” have costs in areas such as:

• Crypto-to-fiat exchange spreads (hidden 1%)
• Currency conversion rates for multi-currency spending
• Regional ATM network restrictions
• Customer support quality differences

5. Geographic and Regulatory Compatibility
Not all products are available in every region. Confirm:

• Whether the card is licensed in your location
• Availability of acceptance points locally
• Completeness of local currency support
• Sufficient withdrawal channels

Usage Scenario Matching Strategy

International Travel
Prioritize: low exchange fees (<1%), no cross-border transaction fees, extensive ATM support, multi-currency support. Total costs are usually 1-2% lower than traditional forex cards.

Daily Local Spending
Focus on: cashback rate (aim for 3%+), whether there is an annual fee, spending thresholds for fee waivers. For users with monthly spending of €500-1000, no annual fee products should be preferred.

Large Transactions
Ensure the card’s single-day and monthly limits meet your needs. Some products have ATM daily withdrawal limits as low as $500, others up to $6000, with significant differences.

Stablecoin Users
If mainly using USDT, USDC, etc., choose products optimized for these assets to reduce unnecessary conversions.

Risk Assessment of Using Crypto Cards

1. Market Volatility Risk

Crypto asset prices can fluctuate sharply, affecting actual returns. If the cashback assets depreciate significantly before redemption, real yields will be much lower than advertised. Users should select reward currencies based on their risk tolerance.

2. Tax Compliance

In most jurisdictions, each crypto-to-fiat conversion may trigger tax events. Users need to:

• Keep detailed records of each transaction’s time and rate
• Calculate potential capital gains taxes
• Understand local tax regulations

This greatly complicates financial management, especially for high-frequency spenders.

3. Cost Misjudgment Traps

Many users overlook hidden costs such as:

• Cumulative exchange spreads (1-2% per transaction)
• Sudden extra fees (e.g., excess ATM withdrawal fees)
• New costs arising during card upgrades

Annual costs can be 30%-50% higher than expected.

4. Network Security Challenges

Although modern cards offer advanced security features, the digital nature of crypto assets makes them targets for cyberattacks. Users should:

• Enable all available secondary authentication mechanisms
• Regularly update relevant apps and devices
• Avoid transactions over insecure networks
• Monitor accounts for suspicious activity

5. Regulatory Change Risks

The regulatory environment for cryptocurrencies is still evolving. Potential policy changes may lead to:

• Service interruptions in certain regions
• Adjustments to cashback policies
• New user verification requirements
• Changes in spending limits

Practical Product Selection Recommendations

Evaluation Checklist

Basic Functionality

• [ ] Does the card support your main crypto assets?
• [ ] Are all fees transparent and verifiable?
• [ ] Are cashback reward conditions acceptable?
• [ ] Is your location within the service coverage?

Cost Comparison

• [ ] Calculate annual total costs based on your expected spending
• [ ] Subtract all fees from cashback earnings
• [ ] Compare the actual costs of 2-3 competing products
• [ ] Assess the potential impact of hidden costs

Long-term Compatibility

• [ ] Do your spending habits match the fee structure?
• [ ] Are the rewarded currencies aligned with your investment strategy?
• [ ] Is customer support reliable?
• [ ] How stable and reputable is the product in the market?

Common Mistakes in Comparison

Misconception 1: Only Focus on Surface Cashback Rate
An 8% cashback sounds attractive, but if there’s a €100 annual fee, 1.5% exchange fee, and locking large amounts of tokens, the actual net return might only be 1-2%.

Misconception 2: Overlooking Usage Scenario Differences
The same card can have vastly different benefits for international travelers versus local shoppers. Make decisions based on your primary use case.

Misconception 3: Underestimating Token Lock-up Costs
Some high cashback cards require locking in tokens worth thousands of dollars, adding an implicit barrier to entry.

Misconception 4: Not Considering Alternatives
In some cases, using stablecoins and on-chain DEX swaps may be more economical than direct spending with a card, especially for large transactions.

Key Observations on Market Development

The crypto card market currently shows several clear trends:

Product Homogenization
Mainstream products are becoming increasingly similar in features; differences mainly lie in fee structures and cashback mechanisms. This limits the scope for optimization.

Upgrading Cashback Competition
Market competition for cashback rates is intensifying (from 1%-3% up to 5%-8%), often accompanied by higher lock-in requirements or hidden fees.

Regional Differentiation
Availability and fee structures vary significantly across regions; a universal “best” choice does not exist.

Increasing Regulatory Pressure
As more jurisdictions participate, some advantages of existing products may diminish due to regulatory adjustments.

Overall Recommendations

Crypto cards serve as a bridge between digital assets and daily spending. Their value lies not in choosing the “best” product but in finding the one that best matches your personal usage pattern.

Decision Framework

1. Clarify your main use scenarios (international travel, local spending, large withdrawals, etc.)
2. List key requirements for each scenario (low fees, high cashback, multi-currency support)
3. Conduct comprehensive cost simulations of candidate products
4. Prioritize transparent fee structures with no hidden costs
5. Start with small transactions to verify actual experience aligns with expectations

Risk Management

• Avoid over-reliance on a single card
• Keep an eye on fee changes
• Regularly evaluate actual returns versus expectations
• Stay flexible amid regulatory environment shifts

Understanding the strengths and limitations of crypto cards, and choosing rationally based on your needs, is the correct approach to fully leverage these tools.