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The BlockFi Bitcoin credit card no longer charges an annual fee — here’s what to consider if you’re thinking of applying

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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 has 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. If you spend upwards of $50,000 on the card, your earnings power jumps to 2% back in bitcoin. It’s a notable difference, but $50,000 is also a massive chunk of spending.

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.

Does the BlockFi Bitcoin credit card have an annual fee?

No. When BlockFi first launched the card, it came with a $200 annual price tag. However, the company made a major change in late May by eliminating that fee. The move keeps BlockFi’s offering in line with other early entrants to the bitcoin credit card rewards race: Gemini’s card will not charge an annual fee when the waitlist period is over, and Upgrade’s recently announced card does not charge one, either.

Read more: The best cash-back credit cards in 2021

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. In addition, new cardholders can earn 5% cash back (5x points) at grocery stores (excluding Target and Walmart) on up to $12,000 in spending during the first year of account opening (then 1x). You’ll also 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

Read more: Chase Freedom Unlimited card review

Does the credit card come with a sign-up bonus?

There is no traditional sign-up bonus that offers a reward for reaching a certain spending threshold. Instead, users earn 3.5% back in bitcoin during the first 90 days, and the accelerated earning potential is capped at the equivalent of $100 in bitcoin. According to the company, the math breaks down to approximately $5,000 of spending for that $100 maximum. 

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.

Read more: The best credit cards to turn rewards from everyday spending into investments

While it comes with the standard Visa Signature benefits, there’s not much else here to report. It’s also important to note that the Gemini Credit Card will pay a 3% bonus on dining out and a 2% bonus on groceries when it launches, although that card’s standard rate of 1% loses out to BlockFi’s offering.

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.”

Read more: BlockFi investing review: Trading with no fees or account minimums

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 with a maximum of $500 in bitcoin each month
  • If you refer friends to BlockFi, you can earn $30 for each referral (on top of the company’s base $10 payout for its Refer-a-Friend program)

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 returns to the upswing it was enjoying earlier this year.

That’s a big “if” right now, though. Over recent months, the shine of bitcoin-based rewards has been dulling. After soaring above a $63,000 valuation in April, the cryptocurrency has plummeted. In fact, it fell below the $30,000 mark on July 20. So, if you had racked up $200 worth of bitcoin rewards at its peak, they would be worth less than $100. 

Read more: How much are credit card rewards, airline miles, and hotel points worth? See our complete valuations for 2021

Perhaps rather than joining a waitlist, it’s wise to wait and see what the future of the new rewards structure holds. It’s clear that plenty of other cards will be offering crypto-based rewards. For example, the Unifi Premier Credit Card from Unifimoney is expected later this year, and it will offer rewards in bitcoin (along with options for payouts in stocks and gold). 

And the other key point to consider here: You don’t need a credit card to be part of the crypto rush. 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.

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