In a statement, 2gether revealed that the card “instantly” converts the cryptocurrency to fiat currency. Users within the 19-member Eurozone economic bloc can utilize the card without paying any fees. The Madrid-based banking startup believes that with its prepaid card it is solving problems associated with making purchases using virtual currencies…..
Category: CreditCard Tools
Whether you want straight cash back or points or miles you can use for travel, there are great options for those with good credit.
When you trade in your credit card rewards for a heap of cash back or travel credit, your moment of elation may be interrupted by a sobering thought: are these rewards taxed? After all, the IRS taxes investment income, cryptocurrency and casino winnings, so it would make sense for there to be some kind of credit card rewards tax. Unfortunately, it’s an issue that takes some digging to get to the bottom of, and even then, the answer isn’t completely clear-cut. To learn about the law surrounding taxes on credit card rewards and find out if you need to fret about giving the IRS its due, keep reading.
The law isn’t clear
This would be an easy question to answer if there was a law that definitively stated whether credit card rewards are subject to taxation, but there currently isn’t one. The IRS may push for such a law soon, since credit card intro bonuses are very generous right now and it may want to start regulating them, but that’s just speculation. Instead, all the legal precedent we have to go on is one IRS announcement and one tax court decision. The announcement, made in 2002, says that frequent flyer miles and other promotional items that you receive as the result of business travel, but that you use for personal purposes, do not produce a tax liability. However, it also says that exception doesn’t apply to travel or other promotional benefits that you convert into cash, or to compensation that is paid in the form of promotional benefits. Since many credit card issuers let you trade their rewards for statement credit or cash, lawyers could interpret that to mean there is a credit card rewards tax.
The court’s decision in the 2014 case Shankar and Trivedi v. Commissioner of Internal Revenue was similar. In the case, couple Parimal Shankar and Malti Trivedi failed to report to the IRS airline tickets that they had purchased with rewards points gained from opening a bank account. The couple argued that the dollar value of the rewards points shouldn’t count as income, since they received it as part of a promotional offer, but the U.S. Tax Court ruled against them.
Tax experts lean toward no
Even though both of the precedents mentioned above make your chances of avoiding a rewards tax look grim, some experts say credit card rewards are largely tax-free. Because you have to spend money in order to earn credit card rewards, whether you’re receiving cash back on your purchases or meeting the spending requirement for an intro bonus, apparently the IRS views those rewards as more of a rebate or discount rather than taxable income. Additionally, even if the IRS taxed credit card rewards, you wouldn’t have to worry about reporting that money unless it met or exceeded $600 per credit card issuer. That’s because $600 is the minimum amount of money you can report on a 1099 form for miscellaneous income, so any amount below that is safe from taxation.
While your credit card rewards are probably safe, the same can’t be said for other financial rewards. In 2012, Citi (a NextAdvisor advertiser) shocked a lot of customers by mailing 1099 forms out to anyone who took advantage of a promotional offer that gave new banking customers a large amount of frequent flyer miles. Citi determined the value of the miles given exceeded $600 per customer, so everyone who received the miles had to pay taxes on them. What’s the takeaway from this? If a reward (including a credit card reward) only requires you to sign up for an account and doesn’t entail spending any money, the IRS is much more likely to view that as a gift, payment or prize and tax it if it’s worth at least $600.
In conclusion, if you’re crazy about earning credit card cash back or points, you shouldn’t fear running into a rewards tax. If for some reason you do receive a 1099 form in the mail from your credit card issuer, though, make sure you factor it into your taxes to stay square with the IRS. For more answers to any credit card question you can think of and then some, check out our credit cards blog.
If you have stellar credit, you want a card with the most competitive offer. After all, if your credit qualifies you for the best, you deserve the best. With so many credit card offers, it’s hard to determine which cards are worth their salt. To help, we’re detailing the top 7 cards for those with good to excellent credit (usually considered a credit score of 700 or higher). Keep reading to find the perfect addition to your wallet.
With the highest intro bonus of any cash back credit card we’ve reviewed (cardholders who spend $3,000 on purchases within the first 3 months from account opening will get a hefty $500 bonus!), the Capital One Savor Cash Rewards Credit Card is hard to beat. It earns an uncapped 4% cash back on dining and entertainment (movie theaters, tourist attractions and more), 2% cash back at grocery stores and 1% cash back on all other purchases. There are also no foreign transaction fees and no annual fee for the first year (then it’s $95).
Discover it Cash Back earns 5% cash back on rotating categories every quarter you activate (up to the quarterly maximum, currently $1,500, then it’s 1%) and 1% cash back on other purchases. Discover will match all of the cash back new cardholders earn at the end of their first year, meaning if you earn $300 in the first year, Discover will match that $300 for a total of $600 back! The Discover it Cash Back card has a long 0% intro APR period and requires average to excellent credit (a credit score of 670 or higher) for approval — click “Show Details” to see more.
If you prefer a straightforward low APR credit card, the Wells Fargo Platinum Visa Card is right for you, as it offers an 18-month 0% intro APR on purchases and balance transfers (with an intro balance transfer fee of 3% for 18 months, then it’s 5%). This card also comes with no annual fee and free access to your FICO credit score. On top of that, those who use their Wells Fargo Platinum Visa Card to pay their monthly cell phone bill will receive up to $600 phone protection against covered damage or theft (with a $25 deductible per claim and a maximum of 2 claims per year).
The Bank of America Cash Rewards credit card offers a $200 bonus to cardholders who spend $500 on purchases in the first 90 days — that’s like earning 40% cash back on the first $500 spent! On top of that, you’ll earn 3% cash back on gas and 2% cash back at grocery stores and wholesale clubs (up to the first $2,500/quarter on gas/grocery/wholesale club purchases). Cardholders will also earn 1% cash back on all other purchases and pay no annual fee. Click “Show Details” to learn about the card’s 0% intro APR period, the customer bonus opportunity and more.
The Citi Double Cash Card offers an 18-month 0% intro APR on balance transfers (with a 3% balance transfer fee, $5 minimum). On top of that, you’ll earn 2% cash back on all purchases: 1% cash back when you make a purchase and another 1% when you pay for the purchase. The cash back rewards do not apply to balance transfers, but we don’t think it is that big of a deal since the card has so many other strong features, like the long 0% intro APR on balance transfers. The Citi Double Cash Card also has no annual fee and offers free monthly FICO scores.
Travel is easy with the Capital One Venture Rewards Credit Card. That’s because this card not only earns an unlimited 2X miles on all purchases, but it also offers 50,000 bonus miles — that’s worth $500 in travel — to cardholders who spend $3,000 on purchases in the first 3 months from account opening. Plus, cardholders will earn an unlimited 10X miles when they book through Hotels.com/Venture through Jan. 31, 2020 and pay no foreign transaction fees and no annual fee for the first year (then it’s $95).
The Citi Simplicity Card – No Late Fees Ever (a NextAdvisor advertiser) offers a whopping 21-month 0% intro APR on balance transfers. The balance transfer fee is a bit higher at 5% with a $5 minimum (other cards usually charge 3%), but 21 months is the longest 0% intro APR we’ve seen, usually making the fee worth paying. Cardholders will also get a 12-month 0% intro APR on purchases. Rounding things out are no annual fee no late fees and no penalty APR, which means paying late won’t increase your APR.
This business card is offering a staggering 200,000 miles with its current sign-up bonus — but you’ll need to do some serious spending to earn that full amount. You’ll earn 50,000 miles when you spend $5,000 in the first 3 months, and another 150,000 miles after you spend $50,000 in the first 6 months. Clearly, this offer is tailored to established businesses with significant expenses that can easily meet that $50,000 spending requirement. But if your company’s able to meet both tiers of spending requirements, you’ll walk away with a stellar 300,000 miles, factoring in the additional 100,000 miles you’ll earn by spending $50,000, since the Spark Miles card earns 2x on all purchases…………….
With a daily transaction volume of over $8 billion, Bitcoin (BTC) is on track to overtake Mastercard, the second largest credit card network in the world, in volume.
On October 30, Mastercard released its financial results of the third quarter of 2018. Year-to-date, the credit card company has processed around $4.4 trillion. On a daily basis, Mastercard has settled nearly $12 billion per day.
Bitcoin, the most valuable cryptocurrency in the global market, has been processing just over $8 billion every day. According to a chart published by Trustnodes, BTC has been able to clear 272,000 transactions per day valued at $8.14 billion.
Mastercard and other credit card networks like Visa primarily handle payments made to merchants in both online and offline ecosystems. Hence, comparing the entire transaction volume of BTC to Mastercard’s volume can be considered as inaccurate.
A more accurate comparison of Bitcoin’s volume would be against the volume of the offshore banking sector as both target individual and institutional investors that process large cross-border payments.
Simply put, the $8 billion daily volume of BTC is a combination of exchange transfers, cross-border payments, and merchant transactions, while Mastercard only represents the transfer of cash to and from merchants.
However, as a minor currency with a total market capitalization of less than $100 billion, nearing the volume of a leading credit card network is a major milestone for Bitcoin.
Previously, the volume of top cryptocurrencies was often compared with remittance outlets like Western Union as Visa, Mastercard, and large-scale financial institutions were out of reach.
The data shows that currently, cryptocurrencies are mainly used as a store of value and as a means to transfer large sums of money. In fact, large cross-border payments rremainas the only advantageous feature of cryptocurrencies over legacy systems in terms of efficiency and practicality.
Earlier this week, Binance, the world’s largest cryptocurrency exchange, sent $600 million with a $7 fee. To send a $1 million through a bank in an international wire transfer, it could cost institutions nearly $10,000 in fees. To send $600 million, a rigorous verification phase, approval period, and significant paperwork is required.
Merchant Adoption Will Materialize
Eventually, as cryptocurrencies like Bitcoin become adopted as a legitimate alternative to fiat currencies, more merchants will adopt the digital asset. Then, it would be possible to compare merchant transactions through crypto with the volume of major credit card networks.
In late 2017, the awareness of cryptocurrencies increased exponentially as BTC achieved an all-time high at around $19,500. Still, merchant adoption remains relatively low and it is difficult to utilize cryptocurrencies at offline shops.
In the long-term, strictly regulated organizations like Bakkt that are supported by leading financial institutions in the likes of ICE, Microsoft, and Starbucks could drastically improve merchant adoption by providing an easy method for merchants to deal with cryptocurrency payments with sufficient liquidity.
In consideration of the fact that the total volume of Mastercard addresses the volume of every local currency the credit card network supports and the comparison between BTC and Mastercard only takes the volume of BTC into account, BTC nearing the volume of Mastercard is still an important achievement for the asset class.
On November 16, the Metropolitan Commercial Bank (MCB) and Crypto.com announced that they are preparing to launch the MCO Visa Card program in the United States. Crypto.com’s press release noted that its MCO Visa Card program had already been introduced in Singapore in October (through its affiliate company, Foris Inc.). Those looking to obtain an MCO Visa card may register via the Crypto.com wallet and card app. The online registration process involves completing know-your-customer (KYC) checks – which include providing a government-issued ID for verification purposes. Moreover, Crypto.com’s wallet users can manage, or monitor, how their card is being used…………..
On November 16, the Hong Kong-based blockchain startup Crypto.com announced that it is planning to issue its prepaid card, MCO Visa Card, in the United States. The company says the card has been approved for launch in partnership with its local bank partner Metropolitan Commercial Bank. Its metal cards promise up to two percent token rewards with its native MCO token, airport lounge access (select cards), tap-and-pay functionality, as well as competitive interbank rates………..