New investors to the crypto scene are usually confused about the payment methods to be used to buy crypto. Since credit cards are a common payment method, they often want to know whether it’s possible to buy crypto with a credit card. Well, much to your relief, you can actually use credit cards for crypto purchases. Cryptocurrency exchanges usually offer a wide range of payment options to choose from. However, among all of them, the most popular one is credit cards. Check out Multibank.io to read to buy crypto with a credit card.
There are both pros and cons to experience and encounter when you buy crypto with a credit card. The article below will discuss both the good and bad aspects of using a credit card from crypto purchase, followed by a brief on the steps to follow to buy crypto with a credit card.
Advantages of buying cryptocurrency with credit card
The major reason why many smart investors prefer to buy crypto with a credit card is convenience and speed. Here is a brief on the best bits of using credit cards for purchasing cryptocurrency.
Convenience of cashless purchase
One of the prime benefits, when you buy crypto with a credit card, is that it offers you the leeway to make an investment even when you don’t have cash handy. The “time” quotient is extremely crucial when it comes to the trading market, especially the crypto market. The crypto scene fluctuates in the blink of an eye and if you find the right price, you should just buy it immediately.
But, what if it’s just the middle of the month and you have to wait for another 15 days for your next paycheck to arrive? As mentioned above, timing is a huge factor in the crypto scene and if you miss the timing, you might not get a favorable price later. This is where you can buy crypto with a credit card.
Credit card offers you the privilege to make a lump sum purchase even when you don’t have cash handy. You can buy crypto with a credit card immediately when you find the right price and there is no need to make the payment instantly. You will get around 20 days to make the payment and by that time you will already have your paycheck.
Speedy purchase
As mentioned above, you will have the facility of instant purchase when you buy crypto with a credit card. It just takes a few seconds to process transactions with credit cards. On the other hand, other payment forms, say wire or bank transfers, might take 3-8 days. It has already been discussed why timing is crucial when you are looking to make a purchase in the crypto world. In that light, you can fathom why the “instant purchase” facility offered by credit cards could be a blessing for crypto investors.
Familiar payment method
Credit cards are a familiar payment method- from shopping at malls to magazine subscriptions, you use credit cards almost everywhere. Thus, another advantage when you buy crypto with a credit card is that you are already aware of the steps of making a purchase with this particular payment method. You won’t have to waste time trying to learn the process and steps of a new payment method here. All you would have to do here is to put in the card number, CVV, and expiry date- then, you are done. This makes the whole process more convenient and smoother for you, especially when you are a beginner.
You will also be glad to know that most of the crypto exchanges that allow you to buy crypto with a credit card usually feature a user-friendly dashboard.
Cons of using credit card for crypto payment
High fees
This is one of the major cons when you buy crypto with a credit card.
Crypto exchanges generally charge higher fees on credit card payment compared to other payment methods. Also, there are various kinds of fees that you have to pay when you buy crypto with a credit card.
Cash advance
You will have to pay this fee when you request for cash straight from the credit card company. In that case, you will have to pay around3 percent to 5 percent when you buy crypto with a credit card. For example, if you borrow around $200 for a cash advance, your fees would be around $6 to $10.
Transaction fees
Almost every crypto exchange out there charges a transaction fee each time you make a transaction on the platform. But, the transaction fee is usually higher when buying crypto with a credit card.
The most minimal fee (transaction fee) that you have to pay when you buy crypto with a credit card is 2%
Fee for foreign transaction
Do you have plans to buy crypto with a credit card from a foreign exchange? Well, then you would have to pay an extra fee for operating with foreign exchange. The foreign exchange fee would be something around 3%.
Risk for sensitive card information
When you will buy crypto with a credit card, you will have to share your confidential details that could be at the risk of exploitation.
Steps to buy crypto with credit card
Go to your chosen exchange from where you want to buy crypto with a credit card
- Sign in to your account
- Click on a tab that says something like “buy crypto”
- Select fiat currency from the list and out in the amount of fiat you need to buy crypto with a credit card
- Now, look for a tab that says something like “add card”. Click on the tab and put in the card details to buy crypto with a credit card
- Enter all the needed information to buy crypto with a credit card
- Click on the “Add Card” tab
- Check the details entered once again before you confirm
- If everything is okay, you can confirm the payment to buy crypto with a credit card
- Wait for a minute and then refresh the page to check live marketplace
- Next, a window will pop up asking for OTP
- Follow the instructions given to verify your payment
- And, you are done
It could be slightly pricey to buy crypto with a credit card. But when you look at the advantages, the process seems to be a worthy one. Not just that, you will also receive rewards for making payments with a credit card that can help to offset the high fees to some extent.
