Crypto Credit Cards: What to Know About Canada’s Limited Options

Canada’s relationship with cryptocurrencies is still evolving. You can buy and invest in crypto easily enough, but the country’s crypto credit card options leave something to be desired.

While some are marketed as credit cards that earn rewards, the crypto cards in Canada are debit or prepaid. It might be more accurate to call them “payment cards.” You can access and spend your crypto reserves, but that’s about it.

» MORE: What is cryptocurrency?

How crypto credit cards work

In the U.S., many crypto cards operate like traditional Visa, Mastercard or American Express rewards credit cards. You use them to borrow money and earn crypto as a form of cash back on your purchases.

With the crypto payment cards in Canada, there’s no borrowing involved because they aren’t connected to a line of credit. Instead, these cards work like prepaid or debit cards, allowing you to spend crypto you already own. They do, however, offer some rewards.

Cryptocurrency is not considered legal tender in Canada, so despite having value, it can’t be spent like dollars. As a crypto cardholder, you must preload funds from a crypto wallet so they can be converted into Canadian dollars and delivered to the merchant as cash.

That means your spending will be limited by how much you’ve loaded into your card, and by the value of your crypto at the time of a purchase, which can fluctuate wildly.

What crypto cards are available in Canada?

The crypto payment card universe in Canada is small. The cards are typically offered by crypto exchanges.

The Crypto.com Visa Card

This prepaid card currently offers between 2% and 5% cash back when you use it for everyday purchases. Rewards are paid out in the platform’s proprietary Cronos tokens (CRO) directly to your crypto wallet.

The card can be topped up with more than 100 types of crypto, but each one will have to be sold and converted to Canadian dollars first.

Crypto.com’s card comes in a variety of tiers. To move into a higher tier, you can either pay a subscription fee or purchase more CRO. Paying to belong to a specific tier might be worth it only for dedicated crypto fiends because they get pretty expensive:

Each tier comes with the same monthly ATM withdrawal cap ($7,000) and top-up limit ($35,000). The benefits vary, but aren’t necessarily up to par with what you’d get from a premium Amex or Visa card.

From Jade Green up to Obsidian, you get Priority Pass airport lounge access and some subscription rebates, but those rebates are paid out in CRO. Cash back tops out at 5% on the Obsidian tier, which seems stingy considering the cost of admission.

The Shakepay Visa Card

Shakepay’s virtual prepaid card is barely a crypto card. While it earns 1.5% cash back in bitcoin on purchases, which are deposited into a Shakepay account, it’s also funded entirely through e-transfers.

The bitcoin you earn can’t even be spent through the card. You have to sell it for Canadian dollars first and then load your card with those funds.

As a virtual card, you can’t use Shakepay at ATMs, but no physical card also means you can’t lose yours and risk someone going to town with the remaining balance. The card can be used internationally, which might seem like an enticing way to earn bitcoin, but the foreign transaction fee is 3% — double your cash back earn rate.

Shakepay tries to make using the card fun and rewarding. You can form a ShakeSquad with up to four other people to earn bonus bitcoin whenever someone in the group uses their card to make a purchase. With ShakingSats, you can earn bitcoin just by opening the Shakepay app and physically shaking your phone.

Oobit

Oobit offers what appears to be a more streamlined process for people looking for a crypto card.

Rather than loading your card with cash that was exchanged for crypto, Oobit connects directly to your crypto wallet and converts your chosen currency into cash at the time of purchase.

Oobit offers up to 10% cash back, which is paid out instantly in Tether (USDT). The amount you actually earn is based on the crypto asset used for each purchase and whatever current promotion might be in effect.

Pros and cons of crypto cards

Pros:

No risk of getting into debt. With crypto debit and prepaid cards, you’re not borrowing money. This means you can’t overextend yourself by spending money you don’t have.

Chance to earn rewards. Crypto-earning cards may offer “cash-back” rewards that are paid to the cardholder in the form of cryptocurrency.

Simpler way to enter the crypto space. For those looking to experiment with crypto investing, crypto rewards cards may provide a less complex way to do so, especially if earned as a reward for typical spending.

Cons:

Exchange rates. Cards funded with cryptocurrency must convert, i.e., sell, your digital currency to Canadian dollars to complete a transaction. This leaves you at the mercy of the prevailing cryptocurrency exchange rates, which can be quite volatile.

Tax considerations. Any transactions involving digital currency are taxable by the Canada Revenue Agency. When cardholders exchange crypto for dollars, or another crypto coin, there may be tax implications. Consult with a tax lawyer or accountant to understand how using a crypto payment card may affect your income tax bill.

Fees. Use a crypto card outside of Canada and you’ll pay a foreign transaction fee that might be worth more than your earn rate.

How to get a crypto card in Canada

Getting a crypto prepaid or debit card is different from applying for a traditional credit card.

For example, before applying for a Crypto.com Visa card you have to sign up for an account on their currency exchange app. You also need to complete the verification process.

To gain access to the cash back function, you’ll have to purchase and ‘stake’ (or deposit/lock) CRO tokens (the exchange’s own coin) in your crypto wallet for 180 days.

With Shakepay and Oobit, the process is simpler. You sign up through the app (or online for Shakepay), provide standard personal information and verify your account. Once you link a bank account (Shakepay) or wallet (Oobit), you’re good to go.

Are crypto cards worth it?

If you’re really champing at the bit to get your hands on more bitcoin, you might be better off just buying some. These cards’ earn rates are fairly low, so earning a significant bitcoin payout will require heavy spending.

If it’s rewards you’re after, a cash back card that earns 5% on groceries or a cheap travel card that offers multiple free lounge passes might provide more bang for your buck — at least until Canada’s crypto card space develops a little further.