Crypto.com Credit Cards

[Citylights18]

We don't talk too much about Crypto credit cards but companies are on the move trying to offer those products.

Typically the ones that have issued credit cards have a top tier of 8% cash back in their utility token currency. For Crypto.com that is by the name of CRO. To get the 8% card you need to have a specific stake (at the moment 2,500,000 CRO) in the utility token.

https://crypto.com/en/cards

At the current price of 1 CRO equals $0.078 USD. This is how much you'd have to spend on a stake the particular token tiers.

2% Ruby $195

3% Emerald $1950

5% Rose $19,500

8% Obsidian $195,000

The nice thing is unlike Block Fi where its a $200 annual fee once you buy into Crypto.com there is no annual fee. Its a rewards debit card and doesn't require a credit check because you are backing the line with your own money.

You're also getting 6% interest on that stake for a 3 month+ commitment in CRO paid out daily. If you had the Emerald and you were spending the same amount as that stake $1950 ($58.5 cb 3%) + $9.63 interest you would be earning $68.13 or $817.56 a year, not to mention potential appreciation on that stake. If CRO goes down in value you can dollar cost average the cash back or upgrad to the 5% card.

If you can get the 195,000 together for the 8% card you would be looking at 8% on the coin and 8% on the CB card. Considering you spent just the $1950 that you did before, that would be $156 CRO and $1285.42 a month from the stake ($1441.42 total). On a yearly basis that is $17,297 of interest paid out.

One thing with the staking levels I notice they go up and down with the price. When the CRO was trading at $0.16 the stakes required were 1 mill, 100k, 10k, 1k.. Instead of costing 195,000 for a stake it was costing 160,000. You might be a time a stake and pay 20% less. Go for a smaller stake in the interim and wait for the price to dip to buy the next level.

I don't think its the kind of earning rates that would replace your top dining, hotel and airline cards but you could use it to cover non-category spend and reduce the number of annual fees you're obligated to pay. The 5% and 8% tiers include a 10% Expedia discount and paid spotify and netflix subscriptions.

Total interest per card level:

Ruby $195 (8%)

Emerald $1950 (9%)

Rose $19,500 (13%)

Obsidian $195,000 (16%)

Its not bad but not the type of ROI you'll get on a hotel card. Rose category though would knock out everything short of  5x categories on transferable point systems. An integrated debit-investment platform rather than just having your cash back in one place and investments elsewhere.

[wasCB14]

Where does the money to buy coins to pay interest on coin balances come from? In buying a stake, are people making a loan to the operations of Crypto.com...even if that stake is in the form of BitCoin and not CRO? Or are speculators borrowing coins from Crypto.com and (hopefully) repaying those loans with "coin interest"?

It's one thing to let a CC dictate where you invest (e.g. BofA Preferred Rewards). Quite another to let a CC dictate what you invest in.

[Citylights18]

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@wasCB14 wrote:

Where does the money to buy coins to pay interest on coin balances come from? In buying a stake, are people making a loan to the operations of Crypto.com...even if that stake is in the form of BitCoin and not CRO? Or are speculators borrowing coins from Crypto.com and (hopefully) repaying those loans with "coin interest"?

It's one thing to let a CC dictate where you invest (e.g. BofA Preferred Rewards). Quite another to let a CC dictate what you invest in.

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The money to buy coins come your deposit. The interest in CRO comes from the DeFi loans they are making to other users. Speculators paying interest on crypto loans.

When you buy a stake, you are buying into a utility currency (CRO). Its just like buying any other currency like Bitcoin. Now you can just buy Bitcoin instead but you wouldn't get the higher earning rates that come with a CRO stake on your crypto.com debit card.

Oddly enough, Bitcoin crashed tonight down 7,000. That has totally adjusted the rates I noted earlier this evening.

At the new valuation of $0.063756 dollars the amount of $ for all the stakes are lower

2% Ruby $159.39

3% Emerald $1593.90

5% Rose $15,939

8% Obsidian $159,390

Its about a 20% discount on all of the stakes in the course of one evening. It pays to wait for the price to go low before buying in.

[iced]

So this is like a pre-paid card based on CRO? I give them dollars for an amount of CRO on a debit card than I then use to buy things (also in dollars) where I get a percentage back (up to 8%) in CRO?

The way it reads on their website, I'm not actually getting cash back -- I'm getting paid a percentage of my spend in CRO credits. It also reads that all transactions are based on USD rather than CRO, so I'm really just trading USD for CRO and they're giving me more CRO for running USD through them?

It also reads that stake in CRO has to be held 6 months -- that's a lifetime for something as volatile as crypto.

This feels risky, and I'm pretty a risk tolerant person.

[wasCB14]

If the USD lost 5% of its value overnight, then it would cause investors to panic (well, maybe not these days, with how desensitized we are to bad news). Crypto enthusiasts would talk about how doomed the USD is. After all, even though it's widely accepted, there's nothing backing it!

But when many crypto currencies, also backed by nothing but much less widely accepted than USD, lose 20% of their value? Then it's a great opportunity to dollar cost average!

(I'm still in real estate and low-risk stocks.)

[iced]

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@wasCB14 wrote:

If the USD lost 5% of its value overnight, then it would cause investors to panic (well, maybe not these days, with how desensitized we are to bad news). Crypto enthusiasts would talk about how doomed the USD is. After all, even though it's widely accepted, there's nothing backing it!

But when many crypto currencies, also backed by nothing but much less widely accepted than USD, lose 20% of their value? Then it's a great opportunity to dollar cost average!

(I'm still in real estate and low-risk stocks.)

---

The dollar is backed by the full faith and credit of a sovereign nation, and that backing is immensely important. While it may feel like nothing, that legal tender status is, in fact, a huge distinction and the reason why many institutions continue to not look at crypto as a legitimate currency.

[wasCB14]

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@iced wrote:

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@wasCB14 wrote:

If the USD lost 5% of its value overnight, then it would cause investors to panic (well, maybe not these days, with how desensitized we are to bad news). Crypto enthusiasts would talk about how doomed the USD is. After all, even though it's widely accepted, there's nothing backing it!

But when many crypto currencies, also backed by nothing but much less widely accepted than USD, lose 20% of their value? Then it's a great opportunity to dollar cost average!

(I'm still in real estate and low-risk stocks.)

---

The dollar is backed by the full faith and credit of a sovereign nation, and that backing is immensely important. While it may feel like nothing, that legal tender status is, in fact, a huge distinction and the reason why many institutions continue to not look at crypto as a legitimate currency.

---

True, and for all the concern about the government inflating its way out of problems (resulting in a loss of purchasing power though not a technical default), it's not really a huge concern at present. The average maturity of Treasuries is only about six years, and a lot of the concern is about future liabilities and not present debt.

That is, high inflation today isn't very likely because the bigger problem is future debt that hasn't been issued yet.

[Citylights18]

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@iced wrote:

So this is like a pre-paid card based on CRO? I give them dollars for an amount of CRO on a debit card than I then use to buy things (also in dollars) where I get a percentage back (up to 8%) in CRO?

The way it reads on their website, I'm not actually getting cash back -- I'm getting paid a percentage of my spend in CRO credits. It also reads that all transactions are based on USD rather than CRO, so I'm really just trading USD for CRO and they're giving me more CRO for running USD through them?

It also reads that stake in CRO has to be held 6 months -- that's a lifetime for something as volatile as crypto.

This feels risky, and I'm pretty a risk tolerant person.

---

The interest is in CRO but use of the debit card is in USD. You have to sell some of your CRO and convert to USD in order to use it to buy.

Its a percentage of CRO but its also an investment. The max supply is 100B so once that is reached the price will shoot up.

Its not really that risky, so long as you don't go for the Obsidian tier where its going to cost you 160,000 to buy into that. 

What I'd recommend if I was going to try it was to move 20,000 over to the account, collect stable coin and then buy into the one of the card tiers as the price become cheaper. Granted that the price has been above $0.06 all but 3 months of this year (March-May) and December where the price is right now is a pretty good time to buy.

You can say that the CRO is a risky investment but you don't have to put much on the line to stake a card. I wouldn't try it if I were strapped for cash but if you could spare 1600 or 16,000 for the token it could make a nice card. There is also a 12% stablecoin rate on USD if you just want to park your money in a higher earning account. No commitment to hold and you can take your money out anytime.

[Citylights18]

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@wasCB14 wrote:

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@iced wrote:

---

@wasCB14 wrote:

If the USD lost 5% of its value overnight, then it would cause investors to panic (well, maybe not these days, with how desensitized we are to bad news). Crypto enthusiasts would talk about how doomed the USD is. After all, even though it's widely accepted, there's nothing backing it!

But when many crypto currencies, also backed by nothing but much less widely accepted than USD, lose 20% of their value? Then it's a great opportunity to dollar cost average!

(I'm still in real estate and low-risk stocks.)

---

The dollar is backed by the full faith and credit of a sovereign nation, and that backing is immensely important. While it may feel like nothing, that legal tender status is, in fact, a huge distinction and the reason why many institutions continue to not look at crypto as a legitimate currency.

---

True, and for all the concern about the government inflating its way out of problems (resulting in a loss of purchasing power though not a technical default), it's not really a huge concern at present. The average maturity of Treasuries is only about six years, and a lot of the concern is about future liabilities and not present debt.

That is, high inflation today isn't very likely because the bigger problem is future debt that hasn't been issued yet.

---

There are a lot of deflationary things going on in the economy. Price competition is intense. Lower population growth rate. Goods last longer and don't need to be replaced, job losses ect. A quadrillion global money supply a 2 trillion stimulus bill is going to hardly make a dent in the overall money supply. Crypto seems to be gaining more legitimacy as an alternative in 3rd world economies where there is hyper inflation.

For Bitcoin I expect it will become too expensive and turn out to be a digital rarity over the longer duration. Etherum has more long term potential since its programmable and there is no production cap. Its easy to trade as the markets run 24/7. It doesn't have to be the buy and hold approach.

[wasCB14]

There's no reason to assume high demand will still be there for a given cryptocurrency. Even for transactors who like the technology and are willing to leave the FDIC/SIPC covered parts of the financial system, there can always be a new ICO with a new cryptocurrency and faster transactions. In that sense, the supply of cryptocurrencies can be infinite.

Coinye West was a thing.