The Bitcoin Credit Card Is A Disaster...

What's up, you Graham? It's Guys here, and it's about time we talk about something that's been getting brought up a lot lately. Well, companies are all out there desperately scrambling over each other to try to find a way to capitalize on Bitcoin almost hitting its record high again of 60 thousand dollars.

We have the birth of something brand new, never seen before, that's about to come into existence for the first time ever. And no, I'm not talking about my brand new vlog channel down below in the description called "This the Family." Instead, we're talking about the brand new Bitcoin credit card and why not getting one.

But I gotta say, even though I was really looking forward to something like this, I was left feeling empty and disappointed after looking into it further for reasons that wouldn't be so obvious at first glance. So here's why. But before we start, if you want to help me feel a little bit less disappointed and empty after reading through it and analyzing all of the fine print, all you have to do to make me feel better is to smash the like button for the YouTube algorithm. You don't have to go all crazy on it like this guy or even this guy, but if you just give it a quick and gentle tap, it helps up my channel tremendously and makes all of this research one thousand percent worth it.

So, thank you so much for doing that, and also a big thank you to HelloFresh for sponsoring this video, but more on that later. Now, initially, I gotta say at first glance, I thought this is a really cool concept, and instead of getting paid back in cash, you're getting paid in Bitcoin.

Which, if Elon Musk keeps tweeting about it and it goes to the moon, there's a small chance that Bitcoin reward may very well pay for your entire purchase at some point in the future. But then, of course, I started looking into the fine print, and that is where things started heading downhill pretty quick.

So, right off the bat, here's the big appeal: one and a half percent unlimited cash back on everything, paid back to you in Bitcoin. Now, in order to be eligible to receive that reward, you'll have to have an account with BlockFi, which is basically just an interest-bearing account where they will hold on to your cryptocurrencies and pay you back up to 9.3 in interest depending on what you keep on their platform.

So, in this case, if you spend two thousand dollars on the credit card and receive thirty dollars back in Bitcoin as your one and a half percent reward, that Bitcoin will also earn an additional six percent annually on the BlockFi account. However, here's where things start going, well, bad.

Even if you hold on to your Bitcoin reward for the entire year and your one and a half percent reward grows by an additional six percent, that's the equivalent of you getting 1.59 unlimited cash back on all of your purchases paid to you in Bitcoin, which honestly is not that good. Like getting cash back on credit cards is absolutely nothing new. The Citi Double Cash gives you two percent unlimited cash back on everything, the Discover It gives you five percent cash back on revolving categories, and the Amex Blue Cash Preferred gives you six percent cash back on groceries.

So really, all this credit card does is pay you less money back for the convenience of investing Bitcoin on your behalf in really small increments. And in order for that to compete with the two percent unlimited cash back on the Citi Double Cash card, the price of Bitcoin would have to go up 33% in a month just for you to break even.

So from purely a number standpoint, the math just isn't there that would make this card worthwhile based on a one and a half percent return. But wait, there's more! The rewards don't stop just there, and they give you the opportunity to make up to seven hundred and fifty dollars more just by doing the following.

The first is through a signup bonus of two hundred fifty dollars worth of Bitcoin when you spend three thousand dollars on the card in the first three months. Now I hate to be a Debbie Downer with this, but when you look at this credit card objectively, spending three thousand dollars for a sign-up bonus of two hundred fifty on a credit card that gives you one and a half percent cash back on Bitcoin is just not that good.

For example, you could get up to five percent cash back on the Chase Freedom Flex and get a two hundred dollar signup bonus for only spending a hundred dollars in the first three months. The Capital One Quicksilver also gives you a two hundred dollar signup bonus with five hundred dollars spent, and the Bank of America card gives you two hundred dollars when you spend a thousand.

That means you would literally be able to get all the offers I just mentioned and have three hundred fifty dollars more left over while still spending a thousand dollars less than you would need to on the BlockFi credit card. Thankfully, though, they do try to redeem themselves by increasing your reward to three and a half percent between months four and six of using the credit card, but they kept that benefit at only a hundred dollars worth of Bitcoin.

Again, at that level, you may as well just use another cash back card that doesn't limit you to only a hundred dollars worth of a reward. Although now, here's where parts of the card get interesting and how it maybe might be worth it depending on how sophisticated you are with using its features.

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Alright, so now that we got your meals taken care of, here's where the rewards get slightly unusual depending on what you're doing with them. First, by getting the credit card, they're gonna be offering you an extra two percent interest on your daily stablecoin balance, paid in Bitcoin, up to two hundred dollars a year.

Now, for those unaware, a stablecoin is just a cryptocurrency that's pegged to the US dollar one-to-one, so one dollar USD is always going to be worth one dollar of a stablecoin and vice versa. But on BlockFi's platform, they will pay you a significant amount of interest on your stablecoins that you keep on the platform.

Now, I'll be honest, but I've never been able to understand how they could afford to pay you such high interest. But either way, BlockFi will increase that interest rate by another two percent, up to the maximum benefits of two hundred dollars per year.

The second, this one is interesting; they say they're going to be giving you 0.25% back in Bitcoin on all eligible trades, up to a maximum of five hundred dollars in Bitcoin every month. Now, I'll admit when I first saw that I was blown away because five hundred a month in Bitcoin could add up to a lot of money except when I realized that you would need to trade two hundred thousand dollars a month to maximize the benefit.

Then to make matters even worse, when I go on my own BlockFi account, trading is disabled because they're only allowed in a few select states that chances are you don't live in, so this won't even apply to you. But if it does apply to you, there's no shortage of articles out there complaining about how expensive BlockFi is to trade from.

And according to random strangers on Reddit who have done the math, there have been reports of BlockFi's average fee working out to 0.7% to 0.9%, which is way higher than if you just used another platform like Coinbase Pro. Of course, to be fair to BlockFi, they're really not meant to be a trading platform, and of course, they deserve to make money. But from a cost standpoint, even a 0.25% reduction in a trading fee still means it's expensive; it's just not as expensive as it once was.

And third, here's actually where they're really good: they'll give you thirty dollars in Bitcoin for every client referral on top of the base referrer friend program, and that is a lot of money. So here's the deal: the base referrer friend program gives you ten dollars for every friend you refer who deposits a hundred dollars or more to their BlockFi interest account.

But once you refer more than five people, your reward doubles all the way to twenty dollars! That means you could literally get fifty dollars for every person you refer who gets the credit card and also deposits a hundred dollars on their BlockFi account, and that could add up to a lot of money.

I would imagine that once this credit card comes out, you're going to have a lot of people telling you to go and get this credit card because it pays out a significant amount of money, even though in my opinion the card itself is really not that good.

And lastly, number four, I wanted to save this one to the very end because it's wild that they would do this, but this card also comes with a two hundred dollar annual fee. So if we go and add everything up that you could potentially get in the first year, here's how much this card is actually worth, and you could then decide for yourself if this card is worth getting.

Assuming you spend twenty-four thousand over the year on the credit card, you're gonna be getting back three hundred and sixty dollars worth of Bitcoin at their one and a half percent reward. Then you're going to be getting an extra hundred dollars for those three months where you get the bonus three and a half percent back in Bitcoin.

That money will grow to about four hundred seventy-two over the year when you apply their six percent interest rate on top of that. You're also going to be getting that bonus two hundred fifty when you meet the minimum spend, bringing your total profit for the year to seven hundred twenty-two. Then, of course, you have that two hundred dollar annual fee, which brings your profit down to five hundred twenty-two dollars in the first year.

Now, for most people, that would just end here if you don't keep ten thousand dollars in stablecoins, you don't refer anybody, and you don't do any Bitcoin trading.

Now, unfortunately, even though the first year seems pretty reasonable, the second year doesn't look anywhere near as good. With two thousand dollars a month spent on the credit card in the second year, you're going to be getting back three hundred sixty worth of Bitcoin plus twelve dollars worth of that six percent interest.

And then, of course, when you subtract that two hundred dollar annual fee, your net profit the second year is only going to be one hundred seventy-two dollars. Compare that to other credit cards like the Chase Freedom Flex, which gives you a two hundred dollar sign-up bonus, up to three hundred dollars in rewards on select categories, plus unlimited one to three cash back on everything else.

That easily comes out ahead every single year because it does not have an annual fee. The Citi Double Cash Rewards credit card also comes out ahead the second year, paying you back four hundred eighty dollars with the same annual spend because, again, it doesn't have an annual fee.

That's all compared to BlockFi's one hundred sixty dollars the second year with the annual fee. So overall, here's my honest take. To me, the sign-up bonus absolutely sucks; three thousand dollars is way too much to spend just to be able to get two hundred and fifty dollars back as a bonus.

The cash back of one and a half percent is alright; it's not the best, it's not the worst. But the two hundred dollar annual fee just ruins the entire thing. It's kind of like if you're baking a cake, but then last minute you decided it would be a good idea to go and pour motor oil over the entire thing and just make it inedible and ruin it.

If the BlockFi credit card did not have an annual fee, then I would say it's probably worth getting. But I think two hundred a year as an annual fee to get one and a half percent cash back in Bitcoin is atrocious. The only thing that I see about this credit card being amazing is the referral program where you could make all the way up to fifty dollars per person who signs up.

But let's be real: the card itself is not really all that good on its own when you compare it with other offers out there, and the only way to make this card actually worthwhile is to refer it to other people who then have to refer to other people, to then make it worth it to them, who also have to refer more people, and just the cycle continues.

And listen, don't get the wrong idea; I actually like BlockFi and I've been using their interest account for the last few months to hold on to my Bitcoin and Ethereum. But the credit card aspect of this, I just got to say it's not for me.

So my thought is just this: if you want to buy Bitcoin and earn interest on BlockFi, you don't need a credit card to do that. Instead, just go and get a good cash back credit card through Chase, Discover, Bank of America, or Citibank, and then either use that cash back to invest in Bitcoin or invest in Bitcoin on your own.

I'm always going to be completely upfront in terms of my thoughts on anything I talk about here so that you know anytime I do actually endorse something like going and getting a free stock worth all the way up to fifty when you use my link down below in the description to sign up for Public, it's actually something I really stand behind. But this, even though I would stand to make a lot of money signing up people to get the credit card, is not something I'm a huge fan of, and personally, I just don't think it's worth it.

However, if they do remove the annual fee, then I got to say I would probably end up getting the card, and one and a half percent cash back is pretty decent; it's okay. And of course, as usual, smashing the like button for the YouTube algorithm.

So, with that said, you guys, thank you so much for watching! I really appreciate it. As always, make sure to destroy the like button, subscribe button, and notification bell. Also, feel free to add me on Instagram; I posted pretty much daily, so if you want to be a part of it there, feel free to add me there as well.

On my second channel, The Graham Stephan Show, I post there every single day I'm not posting here. So if you want to see a brand new video from me every single day, make sure to add yourself to that.

And lastly, if you want a completely free stock worth all the way up to fifty, use my link down below in the description, and Public is going to be giving you a free stock for signing up and depositing a hundred dollars. And I'm posting all my stock trades on there, so if you want to see what I'm buying or selling, use that link down below in the description.

Enjoy! Let me know what stock you get. Thank you so much for watching, and until next time.