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Cryptocurrency has emerged as one of the most popular investments in 2021. There are hundreds of currencies on the market, ranging from Bitcoin to Ethereum to Dogecoin, and celebrities such as Elon Musk and Mark Cuban have lauded their merits. If you do not possess any cryptocurrency, you may feel as if you are missing out.
However, a question pops up in mind, what is cryptocurrency? Cryptocurrency is a digital payment mechanism that does not rely on banks for transaction verification.
It is a peer-to-peer payment system that allows anybody, anywhere, to send and receive money. Cryptocurrency payments exist solely as digital entries to an online database identifying specific transactions rather than as tangible money carried around and exchanged in the real world.
Additionally, transactions involving bitcoin funds are recorded in a public ledger. Digital wallets are where cryptocurrency is kept.
Can I Buy Crypto With A Credit Card?
Yes, you can buy crypto using a credit card. It, however, is heavily dependent on your credit card company and the crypto exchange.
To purchase and sell crypto, you must first register with an exchange. A platform that, like a stock market, allows crypto trades. There is one limitation: several of the most prominent exchanges do not accept credit card transactions.
However, the biggest disadvantage is not the availability of credit cards as a payment option but rather the costs associated with using a credit card to purchase.
Furthermore, you will almost certainly be charged extra card costs - assuming your issuer permits crypto transactions at all. Although some issuers let you charge cryptocurrency purchases to your card, they consider it a cash equivalent and classify the transaction as a cash advance, which carries substantially higher interest rates and a 5% cash advance fee.
How To Buy Crypto With a Credit Card?
Using a credit card to purchase cryptocurrency is a simple process. There are some necessities that you can consider before starting the process. It includes:
- Debit or Credit Card
- Cryptocurrency Wallet
- Mobile Phone for a selfie
- Images of your passport / national ID card (both sides) / driver's license scanned or photographed (both sides)
After you have fulfilled all the essentials, a few steps we have coined here will help you in a smooth transaction.
1. Look For An Exchange That Accepts Credit Cards
The first step is to sign up for a cryptocurrency exchange that accepts credit cards. Depending on which one you select, you may be required to submit some personal information and prove your identity.
2. Check To See Whether Your Card Issuer Accepts Crypto Purchases
Before proceeding, check with your credit card company to ensure that it permits crypto purchases. Inquire if the transactions would be considered normal purchases or cash advances.
3. Fill In Your Payment Information
Next, enter your credit card information and store it as a preferred payment method.
4. Create Your Transaction
Choose which cryptocurrency you want to buy, the currency you want to use, and the quantity you want to buy. Proceed with the purchase once you have confirmed all the details and verified them.
5. Pay Off Your Amount Instantly
It's important to avoid letting interest rack up on your credit card balance, especially because you've already had to pay hefty fees for the transaction, and you're likely getting charged the higher cash advance annual percentage rate. Make it a priority to pay off your balance as soon as you have the funds.
The process is more facile when choosing the right platform for crypto purchasing using your credit card. You can go to Coingate and buy crypto with a credit card on the go. This platform is effortless and supports a plethora of cryptocurrencies.
Why Buy Crypto With a Credit Card?
Buying crypto with a credit card is handy in some ways.
You Can Invest Even If You Do Not Have Any Cash On Hand
If you want to acquire a coin before you anticipate its value will rise, utilizing a credit card allows you to do it right now. This way, you ensure that you do not miss out on huge upward movements while saving for a buy.
Earn Potential Returns On Your Investment
If your credit card company accepts crypto transactions like everyday purchases, you may be able to benefit from lower interest rates and receive points on your spending.
However, you can also face some drawbacks when it comes to buying crypto with a credit card.
In addition to any fees imposed by your card issuer, you will almost certainly have to pay a charge to the crypto exchange platform each time you make a transaction. That implies your crypto profits would have to be rather substantial before you even break even.
Final Thoughts
In a nutshell, buying crypto with a credit or debit card is not difficult. The process becomes smoother for you with the right platform. With some perks, there are some odds, too. The extra fees it costs will make it less beneficial, more likely wiping out almost any returns from the cryptocurrency.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.