Welcome to our RedotPay 101 series, where we dive into the most frequently asked questions about RedotPay’s crypto-powered payment solutions. Today, we’re focusing on our Credit Account, a feature that allows users to hold crypto, spend credit by leveraging your crypto assets for everyday spending without directly using your holdings.
Whether you’re new to RedotPay or looking to better understand our Credit Account, this guide addresses the most commonly asked questions our users have. Let’s dive in!
One of the most common questions is about the distinction between the Credit Account and Funding Account. Simply put, these accounts serve different purposes for managing your crypto assets.
A Funding Account is where your crypto assets, like USDC or Bitcoin, are stored. When you spend from this account, you’re using your own crypto directly. Think of it as a digital wallet for your holdings.
In contrast, a Credit Account allows you to transfer crypto from your Funding Account to secure a credit limit for spending. Instead of spending your crypto outright, you can use credit to make purchases with your RedotPay Card. Your crypto acts as collateral, and the credit limit is determined by the LTV (Loan-to-Value) ratio of the deposited assets.
This setup offers flexibility, as you can spend now and repay later, while your crypto remains in your account, potentially appreciating in value. Plus, you can easily move assets between the two accounts as needed.
Another common question is why transferring, say, 10 USDC to a Credit Account results in only 9 USD of usable credit. This is because RedotPay applies a 90% loan-to-value (LTV) ratio for stablecoins like USDC. So, when you transfer 10 USDC, you get 9 USD in credit to spend with your RedotPay card.
In general, you get a credit limit in your Credit Account by transferring eligible crypto assets from your Funding Account, based on the Loan-to-Value (LTV) ratio of the deposited assets.
For example, if you transfer $10,000 worth of BTC to your Credit Account, RedotPay will provide you with $6,000 in credit (at 60% LTV).
Making a repayment on your Credit Account is straightforward and can be done in three simple steps:
1. Open the RedotPay app.
2. Select [Credit] on the homepage.
3. Tap [Outstanding (USD)] to view and settle your balance.
Always ensure you understand the amount of credit you’ve used, as any spending from the Credit Account will require repayment, even if you initially transferred your own crypto as collateral.
A common point of confusion comes up when users notice interest charges despite transferring their own crypto to the Credit Account.
When you move assets from your Funding Account to your Credit Account, you’re not spending those assets directly. Instead, RedotPay uses them as collateral to issue you a credit limit. Any purchases made with this credit are essentially a loan, which is why repayment, and sometimes interest, comes into effect.
This structure allows you to retain ownership of your crypto while accessing flexible spending power.
If you want to move your crypto assets from your Credit Account back to your Funding Account, you can do so in three steps:
1. Open the RedotPay app.
2. Tap [Credit] on the homepage.
3. Select [Transfer Out].
The Credit Account offers a key advantage: you don’t have to spend your own crypto directly. Instead, you use the credit provided to make purchases, keeping your crypto holdings.
This is ideal for those who want to hold onto their assets for potential future gains while still enjoying the convenience of a crypto card for everyday transactions.
The Credit Account bridges the gap between crypto and everyday spending. By using your crypto as collateral, you can access credit to shop, dine, or pay bills with your RedotPay card, all while keeping your assets in your portfolio. Whether you’re a crypto veteran or just starting out, the Credit Account offers a practical way to integrate digital assets into your daily life.
Ready to experience a more powerful, flexible, and secure way to spend crypto?
Download the RedotPay app today and start using your Credit Account.
Want to learn more about the Credit Account? Check out the following articles:
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Disclaimer: This publication is for informational purposes only and is not intended to constitute legal, financial, investment, or any other form of professional advice. RedotPay assumes no responsibility or liability for any errors or omissions in this publication. The information contained in this publication is provided on an “as is” basis, and RedotPay makes no representation or warranty, whether expressed or implied, in relation to it and its use. The information is provided with no guarantees of completeness, accuracy, usefulness, or timeliness. Readers should seek professional advice before taking any action in relation to the matters dealt with in this publication. The English version shall prevail in the event of any discrepancy or inconsistency between the various language versions hereof.
