The BlockFi Bitcoin credit card waitlist is open — here's what to consider if you're thinking of applying
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- The waitlist is officially open for the first-ever Bitcoin rewards credit card from BlockFi.
- There’s a $200 annual fee and few benefits — unless you plan to invest in and trade cryptocurrency.
- Deciding whether to open a Bitcoin credit card relies on understanding the volatility of the market.
- Read Insider’s guide to the best rewards credit cards.
Pay with your credit card, and pay yourself back in bitcoin — that’s the value proposition of the new BlockFi Bitcoin Rewards Credit Card, which recently opened its waitlist to everyone. It’s the first-ever credit card that replaces the traditional cash-back or miles-and-points rewards structure with the ability to rack up the cryptocurrency that appears on Elon Musk’s Twitter bio.
All purchases earn 1.5% back in bitcoin. So, spend $100, and you’ll get $1.50 worth of bitcoin.
As you continue to see Bitcoin in headlines everywhere you turn, should you apply to have one of these cards land in your mailbox? Weigh these key considerations before adding your name to the waitlist.
We’re focused here on the rewards and perks that come with each card. These cards won’t be worth it if you’re paying interest or late fees. When using a credit card, it’s important to pay your balance in full each month, make payments on time, and only spend what you can afford to pay.
Does the BlockFi Bitcoin credit card have an annual fee?
The card’s rewards currency may be new, but it includes a common component of all cards in the premium market: a cost to carry it. Cardholders have to hand over a $200 annual fee. In the first year, you’ll offset this via a slight twist on a traditional sign-up bonus: $250 in bitcoin after spending $3,000 in the first three months. There’s an additional incentive in the second quarter of account ownership: 3.5% back in bitcoin on all your purchases, up to the equivalent of $100 of bitcoin.
If you’re just considering the BlockFi Bitcoin credit card for the ease of earning bitcoin for your regular purchases, this sign-up bonus isn’t worth it. Instead, you’re better off looking for a cash-back credit card that charges no annual fee and using your cash to make your own purchase of bitcoin. For example, the Chase Freedom Unlimited® currently offers a very attainable sign-up bonus of $200 after spending $500 in the first three months from account opening. Plus, you’ll earn 1.5% cash back on every purchase with higher payouts in certain categories — 3% back on dining and drugstores and 5% back on travel booked through Chase.
Are there credits or perks that apply to your everyday spending?
An initial sign-up bonus isn’t everything. After all, a good credit card should demonstrate its value each day — not just for the first 120 24-hour periods that it’s in your wallet. For now, the BlockFi Bitcoin card falls short of traditional cards in this space.
While it comes with the standard Visa Signature benefits, there’s not much else here to report. The $200 annual fee price tag feels closest to the American Express® Gold Card, which has a $250 annual fee (See Rates). That sticker price, though, also delivers up to $120 worth of dining statement credits each year via Grubhub, Seamless, Boxed, and other participating merchants. Cardholders also receive up to $120 in Uber Cash (up to $10 per month, and the Gold Card needs to be added to the Uber app to receive the Uber Cash benefit) credits each year for use on rides or Uber Eats orders in the US. So, you’re left with a net $10 fee that can be covered via a number of bonus spending categories.
Other issuers have recently added benefits to justify their value. For example, Chase Sapphire Preferred® Card and Chase Sapphire Reserve® cardholders can take advantage of Peloton credits through December 31, 2021, and certain Amex cards are offering targeted statement credits for dining or wireless service throughout 2021.
What is your relationship with Bitcoin?
Ultimately, this is the most important question in helping you determine whether this new BlockFi card — or any Bitcoin-based rewards credit card — is a good fit for your finances. When I spoke with Zac Prince, the CEO and founder of BlockFi, about the card at the end of last year, he highlighted that the card would be especially appealing to someone he described as “crypto curious.”
However, the additional incentives of this card are not geared toward someone who wants to enroll in a Bitcoin 101 course. It’s more for someone who is deeply committed to crypto — and who isn’t aiming to immediately spend their rewards. Sure, you won’t find bonuses on taking Lyft rides or ordering DoorDash, but you will earn in other ways if you are investing more of your own money with BlockFi or asking your friends to do the same:
- If you hold stable coin assets in a BlockFi interest account, you can score a 2% APY bonus
- If you trade cryptocurrency on BlockFi, you can earn 0.25% of your trading volume each month
- If you refer friends to BlockFi, you can earn between $10 and $50 per referral
Sound more complicated than trying to transfer points for a first-class long-haul seat? If you aren’t well-versed in cryptocurrency terminology, it is. However, the thinking on BlockFi’s end is the same as Chase, Bank of America, or any other traditional banking name: Do more business with us, and we’ll give you more back.
Where is Bitcoin going next?
Now, here’s the question that you cannot answer, but you must consider. The promise of Bitcoin as a rewards currency is building wealth instead of immediately booking trips. And that is appealing — if Bitcoin continues to appreciate, you can use that cash to go anywhere you’d like.
Consider this example from the beginning of this year. If you spent $1,000 on this card on January 1, you would have earned $15 back in bitcoin when the asset was valued at $29,333. At the time of writing this post, that $15 is worth $21.30 — reflecting Bitcoin’s 42% increase in value. If you spend a lot of money on your credit card, you can see how Bitcoin’s recent meteoric rise could be very rewarding. JPMorgan recently sent private clients an introduction to cryptocurrency that included quite the insane range for Bitcoin valuation: $21,667 to $1.9 million, depending on different metrics.
Will Bitcoin go toward that two-million-dollar mark, or will it fail to achieve that level of massive growth? No one knows its future. One thing is for certain, though: BlockFi is going to have competition. Gemini — the crypto company backed by the famed Winklevoss twins — has plans for its own credit card, but it will earn a 3% bitcoin return.
Perhaps rather than joining a waitlist, it’s wise to wait and see what the future of the new rewards structure holds. You can easily buy and sell bitcoin. It’s a bit more work — with additional implications on your personal finances — to open and close a credit card.
David McMillin has written about credit cards, mortgages, banking, taxes, and travel for the past 10 years. His goal is to help readers figure out how to minimize fees and maximize rewards.
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