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Cryptocurrency: Should You Buy Crypto With A Credit Card?

BitForex
Dec 27, 2022


Yes, that is the response. For a variety of reasons, credit cards are preferred by many users. Here are some reasons why using one to purchase cryptocurrency is something you should think about.
When purchasing cryptocurrency, some users favor wallets or bank transfers. These techniques have the lowest costs, but they can be slow for someone who values comfort and speed. Credit cards are the best choice in this situation.

Why Should You Buy Crypto With A Credit Card?

Here are all the advantages of using a credit card to purchase cryptocurrency now that you are aware of the fees involved.

You can invest without having cash on hand by using a credit card:

Every crypto user is aware of how quickly the market changes. Buying a coin at its lowest point or, worse yet, at its highest point could depend on the passage of a few days. Maybe your paycheck will come next week. If you have a credit card and enough cash on hand, you won't need to worry.

Swift and immediate:

Credit cards' speed makes it simple for new users or investors to buy cryptocurrency using fiat money. Transactions using credit cards are finished in a matter of seconds.

Beginner-friendly:

For beginners who don't want to struggle with the complex procedures on more sophisticated crypto exchanges, credit cards are the perfect payment option. Particularly for those new to cryptocurrency, using a credit card for payment is comfortable. Your card number, expiration date, and CVV are the only information you need to enter.Additionally, cryptocurrency exchanges and platforms that accept credit cards are frequently very logical and user-friendly.

Earn benefits by staking:

A common misconception is that "all the transaction fees accumulated will wash out rewards earned from credit card crypto purchases," but this depends on how you use your cryptocurrency. Nowadays, a lot of cryptocurrency financial products, like staking, offer alluring yields.

What Kinds of Credit Card Fees Are There?

Cardholders can anticipate paying fees to the credit card company as well as the exchange where the currency was purchased. Do your homework before using your credit card for any purchases to find out how much each one will cost and whether or not there will be a financial benefit.

Fees for Cryptocurrency Exchanges:

When making a purchase or deposit of cryptocurrency using a credit card, the exchange may impose commission and/or service fees. Depending on the exchange, vendors within the exchange may also determine fees for customers based on a number of variables, including the vendor's location, the value of the purchase, and the credit card type being used.

Company Fees for Credit Cards:

Some credit card companies treat cryptocurrency purchases made by cardholders as cash advances.
A cardholder may be charged a variety of fees, including:

Cash advance fees:

Some credit cards consider buying cryptocurrencies to be cash advances. This suggests that there is a cash advance fee associated with each cryptocurrency purchase. Fees are in addition to any fees the vendor or exchange may charge.

Interest rates for cash advances:

The annual percentage rate (APR) for cash advances is typically higher on credit cards—over 25%. This is a market-dependent variable interest rate. From the day the purchase is made until the credit is fully repaid, interest will start to accumulate.

No credit applied toward rewards or bonuses:

Generally, credit used to buy cryptocurrency (and thereby make a cash advance) is not eligible for any purchase rewards or applied toward spending that would normally be eligible for a welcome bonus.

Lower credit limits:

The credit limit for cash advances is frequently less than the cardholder's total credit limit that is applicable to the card itself. The terms and restrictions for cash advances may limit the number of large cryptocurrency purchases that cardholders can make.

Buy Cryptocurrency Online

There are many online platforms to buy cryptocurrency. Before you buy cryptocurrency in any platform, some points need to be considered:

  • Security
  • Ease of use
  • Compatibility with Fiat
  • Additional cryptocurrencies
  • Other attributes

Prioritizing security features over other facets of the user experience, we prioritized selecting online brokerages with strong security features. These exchanges are all regarded as secure and allow you to purchase cryptocurrencies and store them in an online wallet on the platform.

Bottomline

One method of purchasing cryptocurrency is with a credit card. Despite having higher transaction costs, credit cards are quick, easy, and don't require having cash on hand.

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