How Crypto Credit-Card Payments Actually Work
Crypto-linked credit cards convert digital assets to fiat behind the scenes. Here’s how conversion, spreads, wallets and reward logic function in practice.
Explore Crypto & Web3 CardsWhat Is a Crypto Credit Card?
Crypto credit cards look like standard Visa or Mastercard products, but they settle purchases by converting your crypto to fiat in real time. The issuer or linked exchange handles all conversions, custody and settlement through traditional payment rails.
Despite the name, transactions at the terminal are not “on-chain.” Your crypto is liquidated, and the merchant is paid in fiat like any normal card payment.
How Crypto Is Converted at Checkout
When you tap or swipe the card, the issuer checks your crypto balance, sells the necessary amount and approves the purchase using fiat rails.
- Preloaded — crypto is converted to fiat before transactions.
- Real-time — conversion happens instantly at checkout.
- Batched — the issuer aggregates transactions and converts in groups.
Reward calculations depend on the issuer: some pay fiat rewards, others pay tokens or points.
Conversion, Spreads & Hidden Fees
Crypto card marketing often highlights rewards while hiding spreads or liquidation costs.
- Exchange spread on each conversion
- Extra crypto liquidation fee (varies by platform)
- Foreign-exchange fees for international transactions
- ATM withdrawal fees and card-network surcharges
Small spreads of 1–3% can wipe out most advertised rewards if usage is heavy.
Volatility, Reporting & Tax Implications
Converting crypto to fiat frequently may trigger taxable events depending on your jurisdiction. Large numbers of small disposals can create complex reporting requirements.
Volatility also impacts real-world value. If markets move between load and spend, you may lose purchasing power despite headline “rewards.”
Explore Related Crypto Card Topics
Part of The CreditCard Collection
CryptoPay.Creditcard belongs to The CreditCard Collection — a network of focused minisites explaining credit card mechanics in plain language.
This page summarizes typical crypto conversion flows, spreads and risks, based on publicly available issuer documentation.
Not financial advice. Always verify issuer details and tax implications in your jurisdiction.
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