In the course of my job, I read a lot about cryptocurrency. Really. Like, too much. And for a long time, I barely understood any of it. DeFi? Blockchains? Staking? Hashing? As someone who is definitively ‘not a math guy’, I let it all wash over me.

However, I recently decided I had to learn a bit about this sector which was becoming a big part of my everyday world. So I started doing some due diligence and tuned into the space with a bit more intention. Eventually, figuring I would learn more with some skin in the game, I opened up a Coinbase account.

Here is where I found the Coinbase Card.

In my humble opinion, the Coinbase Card is the single best rewards card you can get in 2021 (for those in the USA — in Europe, this card is plagued with fees & is considerably less useful). Let me explain:

The Coinbase Card is a no-fee debit card (not a credit card), which currently pays you 4% back on every purchase you make. These rewards are deposited instantly into your Coinbase account in the form of selected cryptocurrencies.

The Coinbase Card: 

• Requires no credit check and no minimum balance
• No annual fees, ATM fees, or foreign transaction fees
• Unlimited 4% back on EVERYTHING — no categories are restricted
• Your USDC (cash) balance earns 0.15% APY interest

For comparison, some of the best rewards credit cards you can get might pay 2% cash back on everything, and maybe 5% for certain stores or categories. Often, these rewards come in the form of ‘miles’ and need to be redeemed using arcane rewards websites. Or rewards are capped at a certain level. As far as I know, no credit cards currently pay unlimited 4% flat cash back.

Additionally, many of the best rewards credit cards require a high credit score or a yearly membership fee. And if we want to get a little more abstract, the entire business model is based on encouraging you to overspend so the credit card company can collect interest and late fees. 

So, to sum up: the Coinbase Card offers a higher rewards rate, is more democratic since it doesn’t require a credit check, and earns better interest on your cash than most banks. Not bad, eh?

How the Coinbase Card works

The card is essentially a prepaid debit card. You load it up with cash, then you spend that cash by using the card anywhere VISA is accepted (that’s everywhere).

1. First, you link your bank account with your Coinbase account. 
2. After doing this, use the funds in your bank account to purchase USD Coins (USDC). USDC is a ‘stablecoin’ co-created by Coinbase which is pegged to the US Dollar. This means 1 USDC stablecoin should always have a value of 1 USD. 
3. When you use the card, Coinbase will deduct the amount of the transaction in USDC from your account. There is no fee here, and you will receive a notification on your phone including the amount of USDC sold, so keeping an eye on your balance is easy.
4. As soon as the transaction clears (often instantly), you will be credited with your crypto rewards! Four percent of your total purchase value, paid out in a crypto of your choosing, deposited immediately into your Coinbase account. It’s just that easy.

A few more details

Buying USDC on Coinbase currently incurs no fee. So load your account with a good amount of USDC. This is the balance you will be using to pay for your debit purchases.

Your USDC balance on Coinbase earns 0.15% APY Interest. This is THREE TIMES greater than the national average interest rate for savings accounts, according to the New York Times. So already, I am making money, and hopefully you are, too.

The Coinbase card can be used online or in-person, physically or digitally, including via Apple Pay and Google Wallet. It also supports swipe, chip & PIN, and contactless (tap to pay) transactions. It works just like any other debit or credit card. You will not receive rewards on ATM or cashback transactions.

What’s The Catch?

There are a few things to be aware of while using the Coinbase Card. 

First, you can only earn 4% rewards in selected cryptocurrencies. Currently, these are: 

• XLM: Stellar Lumens
• GRT: Graph Tokens
• AMP: AMP Tokens
• RLY: Rally Tokens

Additionally, you can choose to be paid in BTC, ETH, DOGE, or DAI at 1%. However, choosing any of these tokens at a 1% rate makes no sense, as Coinbase makes it easy to convert any of the above tokens into Bitcoin or Ethereum with no fee. 

So you should choose to earn 4% in XLM, GRT, AMP or RLY, and then if you prefer to have Bitcoin, simply exchange your reward tokens for Bitcoins on Coinbase, for free. Coinbase will take a small profit by using a spread in the exchange rate, but it won’t approach 3%. 

Coinbase will charge a fee for converting your rewards back to USDC or selling them for cash. 

The other problem is if you pay with any asset other than USDC. The Coinbase card can be set up to pay with any crypto in your account, however, paying with say, Bitcoin, will incur a 2.49% transaction fee, cutting into your rewards. 

To avoid this, ensure you have sufficient USDC on your card, and make sure it is set up to pay ONLY with USDC.

The Coinbase Card is Great For Beginners

Here’s why — cryptocurrencies are extremely volatile. They are known for going up and down by insane percentages, making it easy to lose all your money (or get obscenely rich). This volatility makes the market intimidating to enter, especially for those without much disposable income.

“Don’t invest what you can’t afford to lose” is the classic investing advice, and that holds doubly true for cryptocurrencies. I’m not advocating anyone YOLO their life savings onto Coinbase. 

HOWEVER

The generous rewards rate on the Coinbase Card means that you are essentially playing with ‘house money’. Your rewards are deposited directly onto the exchange, so there is no friction with transferring from your bank. And once you own some crypto, you stand to profit with the movements of the market. If the market crashes and you lose it all, your cost-basis was zero.

Why shouldn’t you try it?

What If My Crypto Crashes?

This is a fair concern. If the cryptocurrency market crashes and loses a lot of value (as happens with some regularity), then your effective rewards rate may end up being quite a bit lower than 4%. You should understand this risk.

But, there also exists the possibility that your coins will increase in value, giving you an effective rewards rate of much greater than 4%. 

My 0.02 USDC

This isn’t a sponsored article — I wrote it because this card honestly seems like an amazing setup, and I thought you might like to know why.

In one month of using this card, I have earned $54.10 in rewards. In a full year, that would be more than $600 invested in crypto markets, generated by nothing more than me living my life. And if we look at the Bitcoin price chart, it’s easy to see that with a little bit of patience, that investment has the potential to grow exponentially.

I am ideologically opposed to credit cards and the consumerist American lifestyle which finances everything through debt — but I use credit cards because they offer cash back (essentially free money, as long as you pay your balance off every month). The Coinbase Card, in my eyes, offers better benefits than credit cards, without needing to support the corrupt credit industry.

This seems a better, more idealistic alternative to a powerful and entrenched centralized system which preys on people in distress. 

Hmm.

Maybe I am beginning to understand the crypto space, after all.

If you are interested in setting up a Coinbase account, you can do so via my referral link. We will both receive a $10 bonus after you buy $100 worth of any coin (including USDC).

This story was first published on Medium.