Bitcoin rewards by "NYDIG Execution" - Upgrade VISA -- value question on cost vs reward

[4sallypat]

Went for a SP pre-approval on Upgrade's Bitcoin Rewards VISA (PLOC) since I started dabbling in crypto.

Approved for $20,000 Upgrade VISA at 9.98%.

My math questions are:

Using the Upgrade card as a way to purchase crypto (primarily use Crypto.com) and then transferring some crypto to different platforms (BlockFi, Celcius, SoFi) and then paying the interest over time - would the gains from the crypto be enough to offset the 10% interest rate ?

How much payment on my Upgrade account (when it pays back 1.5%) will I need to make in order to break even ??

Bitcoin questions:

Who is NYDIG Execution LLC ? 

What do they do different that my other crypto platforms I currently use  - anyone experience using NYDIG ?

90 day lock on the ability to redeem - is that normal for a non stablecoin redemption ?

Terms of the NYDIG Bitcoin rewards are summarized:

1. How You Earn Rewards. Earn unlimited 1.5% back in bitcoin rewards when You make payments on Your purchases with Your Upgrade Card. Payments on non-purchase transactions, such as sending funds electronically to Your bank account, are not eligible to earn rewards.

   1. If You make a payment more than five business days before Your current due date, we will purchase bitcoin within one business day of Your current due date. If you make a payment five or fewer days before your current due date, we will purchase bitcoin on the business day after your next due date. However, we may in our sole discretion decide to purchase bitcoin for you earlier, in which case we will purchase bitcoin within one business day of your current date. You should be aware that the price of bitcoin (and the amount of bitcoin you receive) will vary depending on when we elect to make the purchase.

   2. Your bitcoin will be held by NYDIG on your behalf as described in NYDIG's Terms. Your bitcoin cannot be transfered to a separate wallet.

   3. You may sell Your bitcoin subject to a 1.5% transaction fee which will be deducted from your sale proceeds. For example, If You sell bitcoin worth $10, you would receive $9.85 in sale proceeds after fees are deducted.

2. How Rewards can be Redeemed. Once you sell Your bitcoin (after the deduction of transaction fees) you will be able to redeem the sale proceeds so they may be applied as a statement credit. At this time, the only way to redeem your sale proceeds is by statement credit. You will be subject to an initial 90-day holding period after the first bitcoin purchase is made on your account, during which time your bitcoin cannot be sold. After that initial holding period You can sell bitcoin at any time until termination of Your Upgrade Card account and/or Your bitcoin account with NYDIG.

[dogmeat]

NYDIG is a respected, major player in the space, runs the Bitcoin Strategy Fund (BTCNX) among other things.

10% APR on $10000 is $1000/yr and rewards earned is $150. You'd need BTC to 7x first year to break even. As your spend on the card increases the corresponding BTC multiple decreases. Overall, paying interest on the card with the expectation of profit from increased value of the rewards seems like a very poor way to do things.

if you believe BTC is going up over 10% every year, take this CC or get a lower APR CC, take out a Cash advance, and buy BTC with it. You pay the same (or less) interest, and get more gains.

[FinStar]

Something to consider, the Upgrade Card (any flavor) does not have a grace period, IIRC. Meaning, any transactions or 'draws' will accrue finance charges (ADB) from the moment it posts. So, you'll have to determine how soon you need to start making frequent payments before it erodes your 1.5% crypto rewards on any given transactions. 

[simplynoir]

Setting aside the financial aspects for a moment here as a crypto holder I am not a fan of the way the rewards are setup for the card. From what I understand you are unable to transfer the bitcoin out since it is held by NYDIG and only able to use it for a statement credits when you're ready to cashout. No clue how that will work tax wise when it is sold for statement credits. Not to mention when you do finally "sell" they charge the same 1.5% you gain from purchasing rewards. You're better off using the cashback from a 2% card and depositing the rewards in a exchange of your choice so you actually own the bitcoin; that way you can do what you want with it

[4sallypat]

So glad I consulted with all of you !

Thanks so much.

I learn something new everyday.