Cryptocurrency has evolved from a toy that a few techies toyed with to an asset class that more established investors are now taking seriously. El Salvador recognizes Bitcoin as legal cash, Elon Musk tweets about it, and PayPal allows customers to buy using cryptocurrencies.
Finding out how to trade cryptocurrencies might be challenging for most individuals.
They are accustomed to using credit cards, though, and appreciate the speed of the transaction. The market volatility makes this especially true. A credit card transaction, for instance, is speedier than a deposit or money transfer.
You may be able to purchase cryptocurrencies directly using some banks’ credit cards. Financial experts may advise against doing this because it’s risky and has drawbacks. However, some cryptocurrency buyers do use credit cards.
How to Use a Credit Card to Purchase Cryptocurrency
Using a credit card to purchase cryptocurrency is a rather easy process. The actions to take are as follows:
- Make sure you can purchase bitcoins from the company issuing your credit card. Inquire whether cryptocurrency purchases will be regarded as normal purchases or cash advances.
- Verify if the bitcoin exchange accepts credit card transactions. Some of them only permit it outside of the United States, while others don’t. As an illustration, consider Coinbase, which disallows American users of the exchange from using credit cards but permits European users to do so.
- You can input your card details to make a payment if both your credit card provider and your cryptocurrency exchange permit credit card purchases of cryptocurrencies. Additionally, you may choose it as your preferred payment option.
- Before completing your transaction, choose the cryptocurrency and the amount you want to spend.
- Incurring down the debt each month can help you avoid paying interest, just as with any other credit card transaction.
Cons of Using a Credit Card to Purchase Cryptocurrency
While purchasing cryptocurrency using a credit card may be reasonably simple, it can also be far more expensive than doing it through a bank deposit or money transfer. Additionally, if you wish to purchase cryptocurrency coins for a reasonable fee, then KuCoin is the best to exchange for working in crypto trading.
But even worse than that, isn’t it. Cryptocurrencies are likely viewed as cash equivalents by your credit card company. Therefore you will be assessed the same fees and interest rates as for a cash advance.
A Better Method for Using a Credit Card to Buy Crypto
There is now a bitcoin credit card, thanks to SoFi. It is the first credit card that enables the direct conversion of points to cryptocurrency. 2% of every purchase made using a credit card might go toward purchasing cryptocurrency.
While this differs from the procedure outlined above, it offers significant benefits in terms of transaction costs because there are no fees associated with turning your cashback into cryptocurrency. This makes it a fantastic method to rapidly and affordably grow your exposure to this asset class.