Nexo Card Review: Use your crypto as collateral and earn 2% cash back
Specially-issued crypto cards are becoming the norm that is quite popular since they allow users to cash out their digital assets and spend them at thousands of accepting merchants worldwide.
These cards resolve one of the greatest drawbacks of cryptocurrencies, which is the inability to use them in everyday life with the same ease as traditional currencies.
Earlier this year, leading crypto lender Nexo teamed up with payments giant Mastercard and DiPocket to launch the world’s first ‘crypto-backed’ payment card.
This guide will present our Nexo Card review, highlighting its fees, rewards, and benefits before showing you how to set up your own card – all in a matter of minutes.
The Nexo Card is mostly a normal Mastercard credit card, accepted almost anywhere, but with a twist. For many, the allure of the Nexo Card is the ability to retain the ownership of their crypto assets, rather than sell it.
Put simply, Nexo gives you the fiat money you need to spend and in return, you provide crypto as security for repayment – and all this is done in the background whenever you make a purchase.
Nexo Card, which was made available in some European countries to begin with, allows users to spend without having to sell their digital assets. Essentially, the card offers users a credit line that enables them to leverage their cryptocurrency as collateral to back the credit granted.
Key benefits of Nexo Card
The Nexo Card allows you to not just ‘hodl’ but also earn nice bonuses with every purchase or ATM withdrawal. What’s more, every card transaction is attached to an instant crypto cashback which can be paid out in either Bitcoin or Nexo’s native NEXO token.
Nexo Card requires no minimum repayments, monthly, or inactivity fees. There are also no FX fees for up to €20,000 per month.
How it works
The card is tied to Nexo’s Instant Crypto Credit Lines. This allows you to use your digital assets as collateral with no credit checks while spending their fiat value at millions of merchants worldwide. All purchases are deducted automatically from your available credit line while your portfolio remains intact.
The credit line can use one or multiple assets as collateral, allowing you to spend up to 90% of the value of your crypto without selling it.
This unique feature caters to cryptocurrency investors who are often dreaming of potential sky-high appreciation in value of their holdings. In other words, those interested in the Nexo card probably aren’t concerned with what their rewards are worth at the time they’re earned.
To see your card number, expiration date and CVC, go to the Card section and tap on ‘Card Details’. You can also freeze or unfreeze your card, reveal or change its PIN, go through your transaction history, track your monthly transaction limits, and change your reward currency – BTC or NEXO.
Spend with 0% interest
Unlike traditional high-cost credit cards, the Nexo product offers a range of annual percentage rates (APRs) starting from 0% and never exceeding 13.9%. To adjust and set up the zero interest feature, go to the Card Settings menu in the Card tab then find the option “Purchase with 0% APR”.
Once enabled, Nexo will transfer just enough collateral to keep your LTV below 20% so you benefit from the 0% interest – provided you have enough assets in your account.
It’s not related to a Nexo card feature, but just be aware that if you sell your crypto for a profit, you could owe capital gains taxes.
Most countries now classify cryptocurrency as property, and thus related transactions are taxable just like any other asset class. Taxes are due when you sell or dispose of cryptocurrency in any way and recognize a gain. The Nexo Card allows you to spend without selling your crypto, hence no taxable event will occur.
Virtual card version
With a Nexo Card, you don’t have to wait for your physical card to arrive. You can activate your virtual version with a single tap and start spending with your phone instantly.
Once connected to Apple Pay or Google Pay, the virtual card functions just like the physical one – you can even make contactless withdrawals on most ATMs.
Nexo is raising the bar for the entire blockchain space by utilizing the most rigorous KYC and AML policies, impeccable risk assessment, data protection, and enhanced cybersecurity.
The financial services company also qualifies as an authorized virtual assets service provider due to its status as a regulated platform. All digital assets held in your Nexo account benefit from a $775M insurance by industry-renowned custodians in the event of third-party hacks, theft, or loss of private keys.
Nexo Card is also equipped with many security features, including the ability to freeze your card if lost, change PIN at any time, and track transactions with instant notifications.
Depending on the loyalty tier, card holders can earn an extra cashback on every purchase or ATM withdrawal. The rewards are paid out in Bitcoin (up to 0.5% back) or NEXO Tokens (up to 2% back). You also have the option to change your reward currency at any time.
Each Loyalty tier has its own crypto rewards rate, here is the breakdown:
- Platinum: 2% in NEXO Tokens or 0.5% in BTC
- Gold: 1% in NEXO Tokens or 0.3% in BTC
- Silver: 0.7% in NEXO Tokens or 0.2% in BTC
- Base: 0.5% in NEXO Tokens or 0.1% in BTC
Currently, only citizens of the European Economic Area (EEA) can order a Nexo Card. On top of that, to be eligible for a virtual card you should maintain a portfolio balance of at least $50. This threshold increases to $500 alongside having a Gold or Platinum Loyalty tier to order a physical card.
Depending on your Loyalty tier, you can enjoy up to 10 free withdrawals. Once the free withdrawal limit is reached, you will be automatically charged €1.99 per additional withdrawal until your monthly limit resets again.
You can also enjoy up to €20,000 in free FX transactions per month. Once you reach your currency exchange limit, you’ll be charged a modest 0.5% fee on foreign transactions.
Keep in mind there are monthly and daily transaction and withdrawal limits on your Nexo Card.
- Monthly: up to €60,000
- Daily: up to €10,000
- Per single transaction: up to €10,000
ATM withdrawal limits:
- Monthly: up to €10,000
- Daily: up to €2,000
- Per single withdrawal: up to €600
Nexo’s customer service team is available by email and live chat for current and potential investors. The crypto lender also maintains official accounts on major social media platforms like Facebook, Twitter, Instagram, Telegram, YouTube, and Reddit.
Nexo was a leading force behind the move to allow crypto holders to gain a yield on their holdings, and now they are looking to push the space forward once again via the Nexo Card.
Since you don’t have to sell any crypto in order to borrow, you avoid a potentially taxable event.
When it comes to the utility of the Nexo card, the card purchases are instant and the maximum is $5,000 with a monthly cap of $10,000. And there are even more benefits for you to enjoy:
- No minimum monthly repayments
- No monthly, annual, or inactivity fees
- No FX fees for up to €20,000 per month
- A generous monthly withdrawal limit of up to €10,000.
- Get up to 10 free ATM withdrawals every month.
- Free additional virtual cards
- Accepted by over 90 million merchants across the globe.