Many leading credit card providers enable users to buy crypto assets via regulated exchanges, offering a convenient and quick investment method. "Use cash to purchase, dollar cost average, and look into other ways to get rewarded for crypto," says Richardson.Yes, buying cryptocurrency with a credit card is achievable in any country. These fees not only reduce your potential gains, but they can also impact your credit score if your purchase is large. While it is possible to buy Bitcoin with a credit card, it isn't the most sound financial decision given the risk of the asset and the fees. If the debt is managed responsibly, you may avoid many of the fees attached to credit cards for cryptocurrency purchases. Quick Tip: You could also consider using your favorite cash-back rewards credit card and use that cash to buy Bitcoin.
Venmo credit card: In a recent company announcement, Venmo will enable a new feature that allows Venmo Credit Cardholders to use monthly cash back in their Venmo account to auto-purchase the cryptocurrency of their choice, with no transaction fees.Brex credit card: This is a credit card for business owners and rewards cardholders up to 8x in Bitcoin or Ethereum.SoFi credit card: In April 2021, SoFi was the first company to redeem rewards points directly into cryptocurrency via their SoFi Invest app.If you meet a certain spending threshold, you can earn a higher rate. BlockFi Bitcoin credit card (not currently available to new applicants): With this credit card, all purchases earn a percentage back in Bitcoin.Keep in mind that even with a bitcoin rewards card, its benefits may erode if you're paying late fees and interest charges on the balance. While using a credit card to buy bitcoin may not be the best idea, there are a few credit cards that can help you earn rewards in Bitcoin for typical day-to-day purchases. "The most significant risk is understanding that Bitcoin is a new technology with a high level of speculation," Dr. It's recommended that you keep your credit utilization below 30% of the credit balance.įees are not the only risk of buying Bitcoin with a credit card - volatility is a big factor, which Bitcoin is known for. Quick Tip: Credit utilization ratio is the amount of revolving credit you're using, divided by the total amount of credit you have available to you. Even if the value of Bitcoin falls, your credit utilization stays the same. Buying Bitcoin can use up your available credit, potentially lowering your credit score.
One of these factors is credit utilization ratio, which makes up 30% of your credit score. There are various factors that make up your credit score. This fee could range between 1%-3% per purchase. If an exchange is based outside of the US, your credit card may also add a foreign transaction fee for each purchase. In some cases it can be $10 or 3% of the cash advance, whichever is greater. This is in addition to the fee for using the cash advance from the credit card issuer. Generally, credit cards treat cryptocurrency purchases like a cash advance which, depending on the card you have, could be between 25% to 27% APR and would begin accrual immediately. So you may be facing broker fees should you to choose to buy bitcoin with a credit card.įor example, allows credit card purchases and charges 2.99% for credit and debit card fees, but this is waived for the first 30 days. Here are the main drawbacks of buying bitcoin with a credit card: Broker feesĬryptocurrency exchanges make money through transactional fees but for the use of a credit card you may be charged even more. "In many cases, purchasing cryptocurrency is considered risky behavior and the credit issuer may close the card or have the credit limit lowered," says Courtney Richardson, Esq., founder of The Ivy Investor. Using a credit card to buy Bitcoin is a highly speculative and expensive proposition in which the drawbacks tend to outnumber the benefits.Īdditionally, Bitcoin purchases are usually assessed differently than regular purchases by credit card issuers. Hans Boateng, founder of the Investing Tutor.
"I prefer individuals to purchase bitcoin with cash," says Dr. Bitcoin or any other cryptocurrency is not recommended.
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