What is a bitcoin prepaid card?
Simply put, a bitcoin prepaid card is a card that you can load with bitcoins, and use anywhere that supports card payments.
There is a fundamental difference between a bitcoin ‘debit’ card and a bitcoin ‘prepaid’ card. With a bitcoin debit card you have an account with all the functions of a ‘normal’ bank account, and your card is connected to this account. With a bitcoin prepaid card you have a card onto which you can load money which you can then spend.
How do bitcoin prepaid cards work?
Like any other prepaid card, but with bitcoin. You top up your card with bitcoins which you can then spend to purchase products and services online and in shops. Often you’ll have an app through which you can check your balance but, unlike bitcoin debit cards, prepaid cards aren’t necessarily linked to an account; they’re cash cards that hold bitcoin. On the technical front, the transactions actually occur in fiat currency rather than bitcoin; there are two ways that these transactions work:
- Exchange at the point of sale. When you make a purchase, whether online or in a shop, the funds are deducted from your bitcoin balance and automatically converted to fiat currency at the current market rate.
- Exchange at the point of loading. When you load bitcoins into your card, they are converted into fiat currency immediately, which you then spend with the card.
How regularly do I have to load funds onto my card?
It’s up to you. If you often make purchases, you can load a large number of bitcoins onto your card at a time or regularly top it up. Some providers have limits as to how much you can load into your card at a time, which often depends on your verification status.
What verification steps are there?
To get a bitcoin prepaid card, you’ll have to register with at least a few personal details. For a fully verified account you’ll have to provide details such as your name, date of birth, and address, and provide two forms of ID (usually a driving license and passport). However, you can choose to have only an unverified account, which can mean supplying as little information as just an email address if you want the card to be more anonymous. This will result in lower loading and spending limits (outlined further down the page), but means you can keep more of your details to yourself.
Are prepaid bitcoin cards accepted everywhere?
Yes and no. You can use your prepaid card to shop for goods and services everywhere that accepts card payments, but some companies will have restrictions for paying repeating bills such as mobile phone contracts from prepaid cards. For payments such as these, it’s better to consider a bitcoin debit card.
What if I lose my card?
For starters, you could opt for a virtual card instead of the traditional chip + pin card, which stops you from physically losing it. However, if you lose a physical card, you can contact your provider to have them deactivate it and send you a replacement – just like with a regular card.
What’s all this about virtual cards?
There are two kinds of bitcoin prepaid cards:
- Virtual. Just as the name suggests, this is a card that does not have any physical existence. You just order it from your provider and receive the details via your email. All you will need is to activate it. Just like its physical counterpart, it comes with all the details, including your name, card number, expiry date, and CVV number, it just only appears on your screen and not in your wallet.
- Chip + pin (plastic). This the same as a regular card. Once you order the card, it gets delivered to your physical address together with an ATM Pin. You can use it online to purchase goods and services or withdraw money from an ATM.
Are there fees?
Bitcoin prepaid cards all charge some level of fees for spending your bitcoin in regular shops and online. Depending on the service provider you choose, the fees charged by bitcoin prepaid cards vary. We’ve created this list of all the possible fees – card providers will usually have a selection of these applied to their cards rather than all of them:
- Card fee. This is the fee that you are charged to produce the card and sometimes includes the delivery of the card to your address. It’s typically a flat fee of around £5 – £30.
- Monthly fee. There’s usually a small service fee that’s charged monthly for account management. Some providers charge as low as £1, while others charge upto £5. You might also come across some service providers that opt to charge their users on an annual basis, which ranges between £10 – £50 – working out cheaper than the monthly payment option.
- Loading fee. When loading your prepaid card with bitcoins, you will typically be charged a small fee, which depends on the amount you want to load. The fees are around 1% of the amount, but there are providers that charge higher, especially when loading smaller amounts.
- Online purchases. Typically there will be no transaction fees for online purchases. But some providers charge a small fee of around £1 for these transactions.
- Retail/store purchases. The fees a prepaid card has for spending money in shops will be the same as for online spending.
- Currency exchange rates. If the funds in your card are kept in bitcoin, the automatic conversion to fiat currency that enables the purchase of goods or services is chargeable – like changing money at a bureau de change. The currency exchange rate can range from 0.7% to 5% of total amount, depending on the service you are using.
- Delivery fee. Typically this will be included in the card fee. However, some services might require you to pay a flat fee of around £5 – £20, especially for delivery to another country.
- Foreign transaction fee. There will usually be an additional fee for foreign spending, which varies from one service provider to another. The charges are typically between 2% to 5% of the amount you spend.
- ATM fees (domestic/international). If you withdraw money from an ATM domestically, you will usually be charged a flat fee of around £2 – £3. If you use the same card to withdraw money outside your country (where the card provider is based), you will pay a higher fee, typically around £3 – £5.
Are there card limits?
Bitcoin prepaid cards are subject to various limits on both spending and loading. The exact level depends on the provider you use as well as your verification status, but typically these are:
- Maximum / minimum balances. You may be required to maintain a certain balance in your account at any particular time. The minimum balance usually ranges between £1 – £10 worth of bitcoin, but there are also providers who allow you to spend all the funds on your card. On the other end of the scale, the maximum balance is usually between £150 and £1,000 for unverified cards and from £10,000 to an unlimited amount for verified cards.
- Spend amount limits (per transaction). If your card is unverified then there will be a limit set on the value of transactions you can make it – typically there is no such limit on verified cards. These limits are generally between £150 and £1,000 depending on the card.
- Load amount limits. As with spending limits, there usually isn’t a load limit for verified cards but there is for unverified ones. This limit will usually be set at around £1,000.
- ATM withdrawal limits. The ATM verification limits also largely depends on user’s verification status. You are allowed to withdraw up to around £200 per transaction if your card is unverified, and in the region £1,000 if you are verified.
Should I get a bitcoin prepaid card?
It’s up to you. It’s a great way to be able to spend your bitcoin as part of your daily life. With an unverified card you can keep your spending much more anonymous than with a regular bank card, whereas with a verified card you will be able to carry out higher value transactions.
How can I get a prepaid bitcoin card?
This is the easy part. Use our comparisons to find the right card and you’ll be able to order it to be delivered to you very soon (or instantly if you choose a virtual card).