Buying crypto with a credit card – what you need to know
The age of cash payments has passed. Today, everyone prefers to pay with a plastic card instead of a wad of cash. In addition, people prefer credit cards over debit card purchases. Credit cards are so common that the average American has about 4 of them.
With that in mind, can you buy cryptocurrency with a credit card? And if so, what is the process for that? Are there any potential downsides? We will find out more about it in the following paragraphs.
Can you buy crypto with a credit card?
Yes, you can buy crypto using a credit card – but this is not a general rule. You will only be able to do so if the credit card issuer allows you to buy crypto with it and if the exchange allows you to buy with credit card.
For example, while you can buy Tron with a card on Guarda, you may not be able to use major banks like Bank of America for most exchanges. Generally, credit cards can only be used in small credit card companies and exchanges.
American Express, for example, is one of the very few major banks that allow crypto purchases with their credit cards. Still, the terms are strict and the cash advance fees can be high.
How to buy crypto with credit card?
The first thing you need to do is find out whether the credit card you choose allows the purchase of cryptocurrency or not – if it does, see what fees it charges. Does it have any cashback prepayment penalties that you need to be aware of? If so, this will help to get your finances in order.
Once you have found your chosen credit card, you need to do some research on the exchanges. See which ones allow you to make a purchase with a credit card. These purchases can be quite difficult, which is why some major exchanges won’t allow you.
Finish funding your account with your credit card. The process is similar when you fund a installment payment with either a debit or credit card. All you have to do is enter your credit card information and link it to your account.
Advantages and disadvantages
The biggest advantage of using a credit card to buy crypto is that you can make your purchases even without cash. You can use the payment line, which you can pay off later. In addition, some credit cards can even lead to rewards after purchases.
The downside is that credit cards are cash advances, which means high fees along with the crypto exchange fee. Additionally, if you don’t pay your debts on time, you can not only damage your money, but also your credit score.
The bottom line
Buying crypto with a credit card is convenient if you have the funds. You just need to make sure that the process is allowed for your chosen credit card and that you have the funds to cover the payments.
