Posted by Cryptocurrency: how do I purchase it with my Credit Card? There are several reports of people making money through Cryptocurrencies and many people wanting to get their own piece of the potential. To purchase Cryptocurrency. You’ll have to use an exchange which is essentially a Website where you can carry trading from one currency to another currency.
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For example, you would use an exchange to trade U. S. dollars for Bitcoin, Ripple, or another Cryptocurrency that you’re interested in making purchases. If you’ve landed on an exchange that accepts credit cards, you might consider using yours for your purchase.
However, using your credit card to Purchase Cryptocurrency isn’t like using your credit card for a book from the bookstore. It’s riskier and more expensive. Before using your credit card to make a purchase of Cryptocurrency or before purchasing Cryptocurrency at all, you should know the potential drawbacks and fees.
Get Cryptocurrency with Card And Pay A Convenience Fee
The Cryptocurrency exchange may charge a transaction fee when you use a credit card, or even a debit card, to Purchase Cryptocurrency. Using ACH (Your checking account and routing) takes a few days to post to your account. But it’s usually free. You’ll have to make a choice between fast and expensive, or slow and free. Rushing to buy because you think prices may go up again, may not be the wisest decision.
Cryptocurrency there is a Limit on the Amount You Can Purchase With a Credit Card
Coin exchange may place a limit on how many cryptocurrencies you can purchase with your credit card either daily or weekly. If you’ve already met the limit, you’ll have to use another payment source or wait until the limit has reset before using your credit card for an additional Coin purchase. Credit Card Issuer Treat Transactions as Cash Equivalent Transactions or Cash Advance.
This means that you’ll have to pay a Cash advance fee on top of any transaction fee the Cryptocurrency exchange charges. The typical cash advance fee on a credit card is either $5 or 10 percent of the amount of the transaction, whichever is greater. So, if you use your credit card to purchase $1,000 of Cryptocurrency, you could pay a $100 fee to your credit card issuer.
You’ll also be subject to the higher cash advance APR on your credit card and you won’t get a grace period even if the Credit card is used with zero balance. Meaning you’ll start incurring interest from the day you make the transition.
Using a credit card to buy Cryptocurrency is more expensive, between the cash advance fee, the higher interest rate, and the lack of a grace period. It is just expensive as if you used your credit card to withdraw cash from an ATM.
A transaction that’s generally also a bad idea. You won’t earn any reward with your credit card, when you use it to make a purchase of Cryptocurrency and your credit card issuer treats the transaction as a cash advance.
Foreign Transactions Fee
Most Cryptocurrency exchanges might be based outside the United States. Using your credit card to Purchase Cryptocurrency on an international Exchange could attract a foreign transaction fee if your credit card issuer charges one. It is 3 percent of the transaction amount.
Using Your Credit Card is a Huge Risk
Using your credit card to buy more Cryptocurrencies than you can afford puts you at a huge risk of going into credit card debt. According to a December 2017 Survey from LendEDU, 22 percent of active investors who used a credit card to Purchase Bitcoin were not able to pay off the balance. They planned to use the profits from Bitcoin to pay off the balance.
That’s a risky strategy for one to implore since there’s no reliable way to be sure that the value of Bitcoin or any other coin will rise. Most experts advise against using credit cards for any type of investment including Cryptocurrency and others.
Finally, your credit card score could be impacted depending on the Amount of your credit card available that you used to purchase bitcoin. It will affect your credit utilization. There is no better way of using a credit card to buy bitcoin.
It does bring any rewards on your purchase, they’re taken out by transactions and the cash advance fee you pay. The lack of grace period means you’ll need to pay off the purchase immediately to avoid paying interest.