Understanding Crypto Card Costs: A Guide to Hidden Fees

Another important aspect to consider is the conversion spread. Each time a user spends using a crypto card, their cryptocurrency is converted into local currency for the merchant. The exchange rate provided at the point of sale is typically slightly different from the live market rate, resulting in a conversion spread that generally ranges from 1% to 2%. While this spread is necessary for facilitating real-time conversions, being aware of it can help users better grasp the true cost of their transactions.

Additional Fees and Considerations

When spending in a different currency than that of the card’s base currency, users may encounter foreign exchange (FX) fees. These fees cover the conversion of one fiat currency to another, which is standard across payment systems. Some platforms may first convert crypto to USD and then to the transaction currency, inadvertently increasing costs. In contrast, modern providers like KAST convert directly into the required currency, reducing unnecessary expenses.

Another common fee is related to Dynamic Currency Conversion (DCC), which occurs when terminals offer a choice between payment in local currency or another currency, such as USD. Opting for USD can lead to higher costs, as terminal rates can include a markup of 6% to 16% compared to standard Visa or Mastercard rates. For example, choosing to pay €100 in USD could incur an additional $14 charge simply for selecting the less advantageous currency.

In addition to these costs, users should be aware of potential ATM and withdrawal fees. When withdrawing cash using a crypto card, users may face fees from both the ATM operator and the card provider. These charges can vary by region and are generally a flat fee or a small percentage of the transaction. For instance, withdrawing $100 might incur an ATM fee of $2 to $3 alongside any provider withdrawal fee. It is often more cost-effective to use the card directly for purchases rather than withdrawing cash, as ATM transactions can involve higher network costs.

Some crypto card providers may also charge administrative fees, such as those for inactivity, card replacement, or maintenance. While these fees are not unique to crypto cards, they are an important consideration before selecting a provider. Many newer platforms strive to minimize these charges while focusing on transparency and customer rewards.

Despite these fees, many crypto cards offer rewards programs that can offset costs. For example, KAST provides up to 10% back in KAST Points on eligible purchases, potentially outweighing the expenses incurred from fees.

Understanding the various costs associated with crypto cards is essential for users aiming to optimize their spending. By being aware of network fees, conversion spreads, FX fees, and other charges, users can make more informed decisions that align with their financial goals. Platforms like KAST are committed to providing transparency and simplicity in the crypto spending experience, ensuring that users can enjoy efficient and rewarding transactions.