In this era of digital currency, more people are showing interest in investing money in different cryptocurrencies. But still, there are a lot of people still wondering how to tap into the crypto. There is a way for such people; you can easily buy these coins using your credit card. In this article, you will know how safely and securely you can use your credit card to buy coins.
First, you must go through the KYC procedure, which will be done in an instant.
This article will provide you with a step-by-step guide to buying crypto coins using your credit card.
Step1: Select The Credit Card Types
Not every card will support the purchase of Bitcoin. You first need to research the credit cards and payment companies that allow you to buy Bitcoin.
Credit cards that support the Bitcoin purchase
- American Express
- Master card
- Visa
Step 2: Research The Exchange
Only some of the many exchanges will allow you to purchase cryptocurrency with your credit card. Even if these exchanges allow you to buy using credit cards, they have set certain conditions to be fulfilled, and it may take more time than usual to complete the procedures and validation.
The crypto exchanges that accept credit card payments with credit card
- Binance: allows to purchase with both a visa and a master card.
- Coinbase: it allows coin purchases with a credit card as long as it supports “3D secure,” which is a type of online security protocol for identity verification.
- eToro: purchase of specific crypto of choice with a Visa or a Master card.
- Crypto.com: allows the purchase of specific cryptocurrencies with a Visa card or a Master card.
- Kraken: allows purchase with Visa and Master card only.
Step 3: Link Your Credit Card With The Exchange.
After choosing the exchange that meets your requirements, you will be asked to fill out the KYC (know your customer) providing your personal information to meet the requirements of the exchange.
The next step is to link your account with the exchange by entering your full name, card number, and billing address.
Once you select the cryptocurrency of your choice, you are asked to enter the amount that you would like to invest and choose the option of paying with a credit card.
After this, you will be directed to your bank’s one-time password transaction page.
Step 4: Purchasing Crypto
Once your card is connected to the crypto exchange of your choice, you can choose the cryptocurrency of your choice. And can start the crypto journey.
Fees And Extra Charges On The Credit Card
There will be multiple fees and extra charges added when you choose to purchase crypto with your card. Before proceeding to buy the crypto with your credit card, take your time to calculate the entire cost, advance fee, and interest along with the crypto exchange fees.
Almost all the crypto exchanges charge a fee, commission charge, or service fee for using a credit card for the purchase.
The fee may exceed or vary depending on the exchange and the vendors within the exchange who decide the cost based on the location, the purchase amount, and the type of credit card used.
Credit Card Company Fees
Excluding the charges from the exchange of your choice, the credit card company also has the right to impose charges on your purchase.
The types of fees credit card companies charge you:
- Cash Advance Fee:
Each cryptocurrency purchase is subjected to a cash advance fee, as most cards treat cryptocurrency purchases as cash advances. The fee of 10 dollars, or 5%, is usually charged. These fees are calculated by excluding the fee charged by the vendor and the exchange.
- Cash Advance Interest Rate:
For cash advances, most cards have a high annual percentage rate(APR), it might go over 25%. This variable interest changes with the market.
- Foreign Transaction Fee:
For each purchase a foreign purchase fee is applied, both vendors from a different country, and the credit card charges fee for foreign transactions.
Blessings And Curses Of Credit Cards
The credit card transactions provide more security than cash transactions, and it is more convenient than other payment methods.
Apart from these, the credit card holds a lot of drawbacks in the crypto purchase. Like only a limited number of crypto exchanges are allowed to use credit cards for crypto purchases, which charge high fees for crypto exchanges. Cash advance high fees and high interest rates are applied. And also, it has a very low cash limit, which means there are chances for failed transactions.
The Bottom Line
If you are planning to buy cryptocurrency by using your credit card, remember it is the most expensive way. Even though there are exchanges that allow you to purchase cryptocurrency, there is a high charge for you to pay. And the transactions may be more time-consuming than the other payment methods.
Before purchasing crypto using your credit card, seek advice from an expert or your credit card representative and know the risks you are subjected to.
