How to Buy Bitcoin With a Credit Card – and Why You Probably Shouldn’t Do It
Bitcoin ‘s price is the lowest in recent weeks, and you can take part in the promotion before its value rises again (if it ever does). There is nothing wrong with investing some money in cryptocurrency if it is money that you can afford to lose, but more and more people are using their credit cards to buy bitcoins.
Depending on how you do it, buying bitcoin on credit can be as safe as any other method, but it can also be downright dangerous. Here’s what you need to know about using a credit card to invest in cryptocurrency and why you should think twice before doing it.
How to buy bitcoins with a credit card
Buying bitcoin with a credit card is as easy as buying with a debit card or paying directly from your bank account, although this comes with a few additional restrictions.
Coinbase, arguably the most popular digital currency exchange, will happily accept your credit card. The only catch is that the company only accepts Visa and Mastercard, so your American Express card won’t work. Coinbase also charges a 3.99% convenience fee, but this applies to both credit and debit card purchases.
If you want to use your Amex, you can try Coinmama , another popular exchange that charges a slightly higher 5 percent transaction fee. You may also want to consider Bitstamp and CEX IO , which accept Visa and Mastercard.
Which credit cards and banks support cryptocurrency?
Finding a place to buy bitcoin is only half the battle, you will also want to make sure your bank or credit card company is actually ready to confirm the purchase. Otherwise, nothing will work, and you will have nothing left.
When it comes to credit cards, Visa and Mastercard allow you to buy cryptocurrency – at least for now. American Express also supports it, but limits you to $ 200 per day and only $ 1000 per month. Chase also lets you buy bitcoins, although finding an exchange that accepts this card can be tricky. Discover is the only credit card company that has banned cryptocurrency purchases entirely, making a decision back in 2015.
As for the big banks, Capital One blocked its customers from purchasing bitcoins using credit cards earlier this month. Bank of America and Citigroup continue to authorize this, but told the Wall Street Journal that they are currently reviewing their policies. JP Morgan Chase also allows you to buy bitcoin credit cards, while TD Bank explained that some sales could be rejected due to security measures already in place.
Why Buying Bitcoins with a Credit Card Can Be Dangerous
Buying bitcoin is still a lot like gambling. The market is so volatile. The risks (and potential benefits) are so great. Therefore, it is important to only invest what you can afford to lose, and this is especially true if you are using a credit card.
According to a poll published last month (via WSJ ), 18 percent of bitcoin buyers have used a credit card. Of that group, 22 percent of these people did not pay for the expenses, instead stating that they planned to use the money they earned from their bitcoins to cover expenses.
It can be tempting to spend more than you can afford and assume that you will get your money back (and then some) as the price of bitcoin skyrockets. But if the value of your cryptocurrency doesn’t rise (or worse, if it falls), you may end up with a ton of money that you don’t have.