MSE ignoring Crypto prepaid debit cards

pphillips

I've read MSE's article on prepaid debit cards,  which can be found here: https://www.moneysavingexpert.com/credit-cards/prepaid-cards/

However, there is no mention of any Cryptocurrency prepaid debit cards such as Crypto.com and Plutus. Both of these are E-money regulated companies and their cards can be used without having to buy any cryptocurrency.

Crypto cards in my opinion (if used sensibly) can provide a much more generous reward system than any of the mainstream cards, so I can't understand why MSE are shying away from them.

adamp87

Mostly because a lot of people don’t understand crypto properly and it’s also risky and fluctuates day on day. Crypto still isn’t accepted main stream at all and has ways to go before being done to do so. Most of it is held by people to see the value it may become.

Reward systems such as cashback, points, nectar.. etc are guaranteed amounts which is why these are promoted.

pphillips

adamp87 said:

Mostly because a lot of people don’t understand crypto properly and it’s also risky and fluctuates day on day. Crypto still isn’t accepted main stream at all and has ways to go before being done to do so. Most of it is held by people to see the value it may become.

Reward systems such as cashback, points, nectar.. etc are guaranteed amounts which is why these are promoted.

Other reward systems do carry some risk though and the rewards are not usually classed as a type of asset. The rewards may expire after a certain period and the reward company may go out of business or decide to end the scheme for other reasons. I don't see how earning crypto as a form of cashback is any more risky, in some circumstances it could actually carry less risk.

jbrassy

First of all, e-money accounts are not proper current accounts, so they do not carry FSCS protection.

Second, the rewards are paid in cryptocurrency which are volatile so it's difficult to understand what the true value of the cashback is. Even if they pay 1% cashback, the cashback is paid in crypto so you might not end up with 1% back. If you want to get higher rates of cashback, then you have to stake thousands of pounds in the native crypto. For example, to get 5% cashback with Crypto.com, you have to buy and hold £30,000 of the native CRO tokens. The value of this could change substantially over time meaning you get back less than you put in, despite earning 5% cashback. The whole thing smells of a ponzi scheme. 

Third, these pre-pay cards have no Section 70 protection, unlike a cashback credit card.

Finally, I would say a start-up like Crypto.com is more likely to go out of business compared to Amex. Would like to see what would happen to all your precious bitcoins when Crpto.com goes under. 

If you want to invest in crypto, be my guest, but I would consider it highly speculative. What are the underlying fundamentals of bitcoin? I couldn't tell you this. However, if I buy Vodafone equities or bonds, I would have some idea of what's driving the prices of these.  

pphillips

jbrassy said:

First of all, e-money accounts are not proper current accounts, so they do not carry FSCS protection.

Second, the rewards are paid in cryptocurrency which are volatile so it's difficult to understand what the true value of the cashback is. Even if they pay 1% cashback, the cashback is paid in crypto so you might not end up with 1% back. If you want to get higher rates of cashback, then you have to stake thousands of pounds in the native crypto. For example, to get 5% cashback with Crypto.com, you have to buy and hold £30,000 of the native CRO tokens. The value of this could change substantially over time meaning you get back less than you put in, despite earning 5% cashback. The whole thing smells of a ponzi scheme. 

Third, these pre-pay cards have no Section 70 protection, unlike a cashback credit card.

Finally, I would say a start-up like Crypto.com is more likely to go out of business compared to Amex. Would like to see what would happen to all your precious bitcoins when Crpto.com goes under. 

If you want to invest in crypto, be my guest, but I would consider it highly speculative. What are the underlying fundamentals of bitcoin? I couldn't tell you this. However, if I buy Vodafone equities or bonds, I would have some idea of what's driving the prices of these.  

Firstly, I never said or inferred that prepaid debit cards are current accounts or carry FSCS protection and I don't believe that the MSE article I referred to says otherwise.

Secondly, I think your description of Crypto.com rewards is lacking in detail and if you believe that cryptocurrency is a ponzi scheme then crypto prepaid debit cards are not for you.

Thirdly, I think you mean section 75 of the Consumer Credit Act 1974 which does not apply to debit cards. However, I think the credit card vs debit card debate is a bit off topic.

Finally, there is no point commenting on the rest of what you say other than that you clearly believe yourself to be correct in your prediction about the demise of cryptocurrency.

jbrassy

I think you're a crypto bro just looking to bait people on here. If you want to discuss crypto, I'm sure there are plenty of forums available on Reddit.

pphillips

jbrassy said:

I think you're a crypto bro just looking to bait people on here. If you want to discuss crypto, I'm sure there are plenty of forums available on Reddit.

I don't really know what you're talking about or trying to get out of this forum. If discussing crypto is not allowed on MSE forums, then this needs to be included in the rules.

m-holland

Well when MSE removed your post linking to a crypto site the other day I think that was the inference that its not allowed

pphillips

m-holland said:

Well when MSE removed your post linking to a crypto site the other day I think that was the inference that its not allowed

Unsurprisingly, I don't agree. I can understand in hindsight why the post you refer to was removed but this one is intended to create a discussion, which is in line with the general purpose of the forum. If you do a "crypto" word search of MSE forums you would find plenty of other posts talking about cryptocurrencies, I can therefore draw an inference that it is allowed.

[Deleted User]

pphillips said:

m-holland said:

Well when MSE removed your post linking to a crypto site the other day I think that was the inference that its not allowed

Unsurprisingly, I don't agree. I can understand in hindsight why the post you refer to was removed but this one is intended to create a discussion, which is in line with the general purpose of the forum. If you do a "crypto" word search of MSE forums you would find plenty of other posts talking about cryptocurrencies, I can therefore draw an inference that it is allowed.

It's fine on the savings forum, just not a good idea to tell people to apply for a largely unregulated market of pre-paid crypto credit cards when no-one knows what will happen when they mine the last bit or another one takes over

callum9999

pphillips said:

adamp87 said:

Mostly because a lot of people don’t understand crypto properly and it’s also risky and fluctuates day on day. Crypto still isn’t accepted main stream at all and has ways to go before being done to do so. Most of it is held by people to see the value it may become.

Reward systems such as cashback, points, nectar.. etc are guaranteed amounts which is why these are promoted.

Other reward systems do carry some risk though and the rewards are not usually classed as a type of asset. The rewards may expire after a certain period and the reward company may go out of business or decide to end the scheme for other reasons. I don't see how earning crypto as a form of cashback is any more risky, in some circumstances it could actually carry less risk.

If you don't see how crypto is financially risky, and genuinely think it "could carry less risk", then I really don't think you should be touching the stuff... There's great potential, but you need to understand the risk if you want to play.

In the space of 3 months this year, the value of CRO halved. If you staked the hundreds or thousands of dollars required for a decent card then you would have lost hundreds/thousands. Maybe you'll get it back, maybe it will eventually make a profit, but you can't possibly know that for sure. When was the last time a mainstream reward system (or cash) devalued by that much without an easy opportunity to avoid it? Not only that, when has a reward scheme devalued your savings account at the same time?

I think it's fairly obvious why MSE couldn't possibly promote such a thing to consumers, many of whom can barely grasp how to use a bog standard credit card properly.