I’ve been using the Crypto.com prepaid debit card to earn a rebate on purchases. Here’s my review!
This post contains a referral link. If you decide to get a Crypto.com card after using my code, we both get $25 in Crypto.com’s token. However, this isn’t a recommendation: decide if it’s right for you, first. Don’t just follow some random on the internet, even if he now has his financial advisor diploma.
This isn’t really a post about crypto
Despite the obvious name, crypto isn’t the main event of this post. You don’t need to understand crypto to get the benefit.
There’s crypto in it, but we’re talking about a prepaid debit card with a rebate on purchases. That’s the one thing to bear in mind as you read this: can you save money using this card? If you can’t, I will say honestly that this might not be the thing for you, except as a bit of fun.
With that out of the way, I’ll begin.
What is the Crypto.com card?
One of the big things about crypto is that bitcoin was meant to replace money. Surprised? It’s on the first page of the bitcoin white paper.
Of course, you can’t spend crypto to buy your food shopping… yet. No amount of Cardano ADA tokens will get your boiler repaired. You can’t rent a car with Monero XMR. No, you need to pay people in cash.
Crypto.com solved this problem by providing the first Visa Debit card that you can top-up with crypto. You deposit crypto onto the card through a smartphone app, shops get cash when you pay with it. Amazing, right? The future really is now.
Here’s the thing, though: you can top this up with cash. You don’t need to buy Bitcoin, Ethereum’s ETH or Polkadot to get the benefits of using the Crypto.com card.
Which is how I use it.
Why bother? What are the benefits?
Crypto.com has a selection of different levels of debit card, each with different benefits.
I am using the red card (Ruby? Pass. I describe colours in 16-bit. Darkish red?). That gives me a rebate on Spotify premium, making it effectively free, and 2% back on purchases. More on that below: this was my incentive for joining the scheme and it’s the bit that will get your financial independence Spidey senses tingling.
In exchange for these benefits, you have to lock up capital. That’s the disadvantage that you need to consider. You need to buy an amount (in my case, £300) of Crypto.com’s own crypto token, CRO, then stake it for 6 months. It earns interest during this time, but like all crypto the price fluctuates.
Since writing this post, the price of CRO has increased fourfold. Yup, my £300 is currently worth £1,200. It could just as easily drop to less than £300 again, though.
Staking? What are you talking about?
This is a fancy word for loaning it back to Crypto.com in exchange for interest.
It’s possible to withdraw the CRO after 6 months for a reduced benefit. It’s also possible that your CRO will have grown in capital value. Theoretically, you ought to have a few more of them in interest.
Locking up £300 is a disadvantage, but if you do the maths and work out that you should save enough from the 2% purchases rebate (more below) to make profit, it might still be an option for you. It’s certainly an option for me, which I’ll explain at the end.
What are the risks?
Effectively, you’re purchasing an investment that isn’t regulated and is normally liquid but might not be if Crypto.com goes bust. That’s the counterparty risk. These guys have been running successfully for some time, so I’m confident that I’ll get my £300 of value, but you might want to check this for yourself.
There’s also the opportunity cost. You could have put that £300 to work anywhere, including your pension or ISA. Locking it up for 6 months in an unregulated asset means you can’t use it anywhere else.
Finally, there’s volatility risk. You buy £300 of CRO, but there’s no guarantee of getting £300 of tokens back at the end if the price drops. Of course, the price can also rise. This is offset a little by the way you receive the rebate, which effectively cost averages for you.
Talk to me about that sweet rebate
Ok, so it looks like cashback. Technically though, it isn’t. Crypto.com give you a percentage of whatever you pay in purchases as a rebate in CRO tokens. For the red card, that’s 2%. So, if I pay £500 for something, I get £10 of CRO tokens at today’s prices in my account.
You can sell these straight away on the Crypto.com phone app if you prefer cash, so it’s effectively a cashback if you choose it to be.
This cost averages your CRO balance, as you end up buying automatically at whatever that day’s price is. Typically, CRO trades at 8-12p per token. There are some other things you can use CRO for, like staking for interest or liquidity mining, but those are outside the scope for this review. I’m in it for the rebate on purchases.
There are exemptions for things that don’t qualify for the 2% rebate. These include mortgage payments, share purchases, utility bills and financial services. Ah well, can’t have everything I suppose. There are also some countries that aren’t covered.
How I’m using the Crypto.com card
Choice of card
Each tier comes with a different colour card. Unless you go with the free one, it’s metal, which is a nice gimmick.
As I mentioned earlier: if you’re not confident that you’re going to make money on top of any loss from the money that you lock up at the start, this may not be for you.
There is a “free” card that grants 1% rebates but no other benefits.
I went with the red one because 2% seemed like a reasonable rate of reimbursement for £300, but I was unwilling to lock in more money for the higher tier until I’d tested it out. The Spotify subscription was a nice bonus, and now I get effectively free music when working from home.
Big, predictable purchases
I have to buy train tickets to commute to work, and these come to about £600 a month. Yup, £600 on travel outside of COVID. Excluding leave and so on, I can reasonably expect £120 in CRO rebates from train fare alone.
When you account for Spotify premium, this means that I can take a big hit on the price of CRO from that £300 deposit before I’m nominally out of pocket. Plus, I’m reasonably confident in the platform’s chances of survival. I can hold those CRO tokens for a while before I feel the need to sell at a loss.
As the “free” Spotify works on a rebate basis, I add my train ticket budget every month, so that the card has that plus the cost of a month’s Spotify on it at pay day. That’s important to note: the rebate for Spotify is also in CRO.
Topping up
You can in theory top this up with crypto, but you’d run the risk of overpaying for something in a token that later doubles in price, for example.
I’m not a fan of that, so I top this up by bank transfer of cash to the Crypto.com app account, then assign the money to the card. There’s a handy picture below to show you how the accounts are laid out on my app.
How is it working out for me?
I’m pretty happy overall. In my case, the huge train ticket expense makes this a winning proposition.
I’m not sure if I will upgrade to a higher tier. We do use Netflix, which comes “free” with the next tier, but I would need to lock in another £2,700. Maybe in the future if I use this for more stuff.
I still use Monzo to manage my budgets. I guess I could conceivably use this card to get something back for my food shopping, but I really appreciate the budgeting tools on Monzo and this has meant that I’ve saved a ton of money, which will probably make more difference to achieving financial independence in the long run than a 2% rebate.
I also plan to use this for holidays and extraordinary spending that I don’t need to be protected by credit card. It’s almost certainly coming out for Christmas shopping. Here are five financial independence books that are suitable for Christmas presents, if you’re interested.
As said earlier, I’m fortunate that the price of my locked tokens has now shot up to £1,200. My plan is to draw £900 of them when the lock-up period ends, leaving £300 in there to keep the rebate but basically making a profit. That wasn’t planned, but it’s a happy accident.
A shameless referral link!
If you’ve read through this and think “hey, I could buy my fuel on that” (or anything else, just seemed like a good choice!), why not use my referral code? We both get $25 in CRO if you download the app and subscribe to a red card or better.
My link: svv6fsr8fs
If you’re not convinced, that’s cool too. Thanks for reading, I hope this has been a bit of food for thought or light entertainment.
I’m hoping that by next week my laptop will be repaired and I won’t have to type this out on a phone anymore. We shall see!
