Traditional Debit Card vs. Crypto Debit Card: Which One Is Right For You?

Modern society increasingly focuses on cashless transactions. Being able to pay by scanning a card can make a lot of transactions faster, easier and more secure. However, it brings up some new questions for consumers. How do you pick which card you want to pay with? There are a lot of options, and they all have their pros and cons. Traditional debit cards and crypto debit cards are two of the most popular choices. To find the right option, you'll need to carefully consider your personal budget and preferences.

What Is a Traditional Debit Card?

A traditional debit card is a payment card connected to your bank account. When you use it, it deducts money from your checking account and uses those funds to complete your transaction.

Traditional debit cards usually run on major debit card networks like Mastercard or Visa. In addition to connecting to bank accounts, some debit cards are also prepaid debit cards that connect to a set amount of funds which you added to the card at the time of purchase.

How Does a Traditional Debit Card Work?

A traditional debit card in Europe generally works by using chip-and-PIN technology. This system stores sensitive information on an embedded computer chip, rather than on a magnetic stripe like with U.S.-issued cards. This ensures greater security and prevents unauthorized access to bank accounts since the data stored on the chip cannot be easily copied or duplicated. 

Additionally, the widespread adoption of contactless technology in European countries has made it more convenient for users to use a traditional debit card. All one has to do to pay for goods and services is tap their card at an NFC-enabled terminal or reader. This method is much faster and more secure than traditional payment methods since it eliminates the need for entering any type of PIN code.  

Benefits and Risks of a Traditional Debit Card

Due to the unique way they work, traditional debit cards can be quite useful, but they also come with some potential downsides. Here are a few pros and cons to be aware of.

Benefits

The main advantage of a debit card is just that it is incredibly convenient. Using one is faster than writing a check or counting out cash. Furthermore, major debit card providers are accepted at almost all retailers and online shops.

Many people also like that debit cards are only meant to spend money you currently have deposited in your account. There are fewer transaction fees, because you aren't borrowing money from a lender. Unlike traditional credit cards, you might also find that you're less likely to spend excessively — since you can't automatically borrow thousands.

Risks

Debit cards might be convenient, but they can cause problems if fraud occurs. Anyone who gets a hold of your card can easily use it to process transactions with a simple tap against an NFC-enabled terminal, and you may be required to pay all the fraudulent charges yourself.

Another problem is that your debit card doesn't necessarily quit working just because your bank account doesn't have funds. Depending on how your account is set up, you might be able to overdraw funds and end up with significant overdraft charges.

When Should You Use a Traditional Debit Card?

Anyone who has funds in a standard bank checking account should have a regular debit card. A debit card makes it fast and easy to get your money out of your account.

It is also a good idea to use a traditional debit card for situations where you want simple, straightforward transactions. Debit cards are especially useful in situations where you can't carry cash or want to pay online.

Ultimately, a traditional debit card is a great tool for day-to-day activities, such as shopping or paying bills.

What Are Crypto Debit Cards?

A crypto debit card is a card that lets you spend crypto in a variety of transactions. The funds for the transactions come from cryptocurrency that is automatically converted to fiat currency.

Just like traditional debit cards, crypto debit cards can be used for in-store and online purchases or for ATM withdrawals, but they're offered through a crypto provider instead of a bank. The card connects to a crypto wallet, and the funds you spend from the card are subtracted from the crypto wallet.

How Do Crypto Debit Cards Work?

From the user's perspective, crypto debit cards work much like any other card. You decide to make in-person or online purchases, and then swipe the card against a machine or enter your card details at an online shop. However, a few additional steps are happening behind the scenes:

1. You provide authorization to a merchant who accepts crypto payments.
2. The merchant sends this information to the crypto payment processor.
3. The processing company communicates with the holder of your crypto wallet to authorize the transfer.
4. Once they confirm you have enough funds, they take the crypto from your wallet and convert it to fiat currency.
5. The payment processor finalizes the transaction with the merchant and sends the merchant the fiat currency.

Benefits and Risks of a Crypto Debit Card

If you're interested in cryptocurrency or decentralized finance (DeFi), a crypto debit card can be very useful. Just keep in mind that they have some unique issues, which people used to traditional cards might not expect.

Benefits

Crypto debit cards are a great way to perform standard transactions and online purchases, while enjoying the perks of digital currency and decentralized finance. You don't have to sign up for a bank account, and crypto debit cards let you use your cryptocurrency in day-to-day life without a lot of extra steps.

Crypto cards offer some unique chances to make money. Unlike traditional debit cards, most card providers offer crypto rewards to those who use their cards. These crypto rewards are often cryptocurrency tokens that can increase in value over time.

Risks

When using crypto debit cards, it's important to be aware of their limitations. Not all nations allow cryptocurrency debit cards or accept crypto payments. You'll need to make sure that the provider you choose is valid in your location.

Keep in mind that your crypto assets are more volatile than fiat currency. Their value shifts, up and down, so the amount of money on your debit card will fluctuate. Unlike a traditional debit card, you'll need to check the value of your crypto before making big purchases.

Another downside is that each transaction comes with some fees. Most crypto debit card providers charge withdrawal fees. There may also be foreign exchange fees associated with converting crypto into fiat currency. These foreign exchange fees vary, depending on what country you're in, but they can be a little pricey.

When Should You Use a Crypto Debit Card?

A crypto debit card is a great choice if you own cryptocurrency and want a convenient way of using your funds and earning rewards. With a crypto debit card, you can skip having to sell your cryptocurrency and convert it to fiat currency. The card provider handles all these little details for you while the rest of your cryptocurrency investments continue to grow.

Crypto debit cards are also very helpful if you aren't able to open (or aren't interested in opening) a bank account. They allow you to get a card that you can use electronically without having to deposit any money in a bank.

How to Choose a Crypto Debit Card

When considering crypto cards versus traditional debit cards, it's important to remember that there’s a lot of variation among crypto debit cards. Most traditional debit cards are very similar, with just slight differences in fees and rewards. Meanwhile, crypto cards are offered by a lot of different companies, with a lot of different features. Here are a few things to consider when figuring out how to pick the best crypto debit card:

• Rewards: Make sure you pick a crypto debit card that offers solid rewards similar to that of crypto credit cards. Some offer truly great benefits, such as cashback rewards per transaction or higher rewards if crypto holders stake their tokens.
• Payment processor: Some crypto cards are backed by bigger companies like Visa and Mastercard. These are accepted by more merchants, so these cards are highly versatile.
• Fees: Check to see what sort of fees are associated with transactions and ATM withdrawals. 
• Supported currencies: Some crypto cards only work with popular tokens like BTC. Make sure your card works with your preferred currency.
• Card company: Crypto debit cards are usually offered by companies that provide crypto wallets or other DeFi services. Make sure you pick a reputable provider.

The latest Bybit Card makes it easy to access your crypto savings whenever you want. As Bybit has entered a strategic partnership with Mastercard for the Bybit Card, you’ll be able to spend at over 90 million merchants worldwide. Furthermore, the Bybit Card is EMV® 3-D Secure enabled. This fraud prevention technology allows for consumer authentication during online payments. As such, you can shop online with ease, without worrying about your security being compromised. 

Bybit Card also has a Loyalty Rewards Program. Earn Loyalty points whenever you spend with the Bybit Card, and redeem them for exclusive rewards! Not only do our debit cards have very competitive rates, but they also work with a variety of crypto types. This ensures you can enjoy all the best benefits of crypto debit cards. Interested to get started? Sign up for the Bybit Card today!

Traditional Debit Cards vs. Crypto Debit Cards: The Similarities

Still not sure which is right for you? The good news is that these two card types have a lot in common, so both will work well in basic situations.

Functionality

The two types of cards look almost identical, and can be used in-person or online. They're all standard rectangles of plastic that fit in a wallet, and you can use them all by typing in a number or tapping it against a terminal.

Availability of Funds

Whether you have crypto debit cards, traditional debit cards or prepaid debit cards, they only work with the money you already have. Unlike a credit card, debit cards don't let you borrow money when you've run out of funds.

Speed of Transactions

Crypto debit cards and traditional debit cards both seem to work automatically. All the digital information gets transferred around at high speeds, so you don't have to wait for transactions to be finalized. They're also very fast and easy to use — as compared to counting out cash or writing a check.

Traditional Debit Cards vs. Crypto Debit Cards: The Differences

Though they have a lot in common, crypto and traditional debit cards aren't identical. To choose the best option for your needs, it can be helpful to consider their differences.

Fee Structures

Most crypto debit cards have higher fees than traditional cards. Not only are they more likely to have transaction fees, but they often have foreign exchange fees, too. However, crypto cards compensate by letting crypto holders earn rewards that they couldn't with most traditional debit cards.

Location and Amount of Funds

The funds that back a traditional debit card are sitting in a bank account, while the funds behind a crypto debit card are digital currencies in a crypto wallet. Due to this difference in funding, traditional debit card balances remain stable, while crypto debit card balances fluctuate as the crypto that backs your card changes in value.

Ease of Setup

Traditional debit cards are often automatically provided through your bank, so it's fast and easy to set one up if you have a bank account. However, if you don't have a bank account, crypto cards are often easier to set up. You can connect them to any wallet without having to become a bank member.

Which One Suits You Better — A Traditional Debit Card or a Crypto Debit Card?

You might prefer a traditional debit card if you don't own any crypto, and want to keep things as simple as possible. This type of debit card is convenient, reliable and has low fees. However, any crypto holder can benefit from a crypto debit card. Though it takes a little more effort to set up a crypto card, even beginners can easily figure out the steps. It makes it much easier to cash out your crypto funds, and it also lets you earn neat crypto rewards.

Keep in mind that you don't necessarily have to choose just one or the other. Plenty of people get both, so they can get all the perks of both types of cards. 

The Bottom Line

Crypto debit cards are an exciting new take on the traditional debit card model. With a crypto card, you can easily turn your crypto assets into real-world products or services. Taking the time to figure out how these unique cards work comes with plenty of advantages. As long as you have a crypto account, it's a good idea to also have a crypto debit card. Try the Bybit Card today!