The age of cash payments has gone by. Nowadays, everyone prefers to make a payment using a plastic card rather than a stash of money. Plus, in their quest to work their credit, people prefer credit cards to 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 using a credit card? And if so, what is the process for that? Are there any potential drawbacks? We’ll find out more about that in the following paragraphs.
Can You Buy Crypto With a Credit Card?
Yes, you can buy crypto by 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 enables you to buy using a credit card.
For instance, while you may buy Tron with card on Guarda, you may not be able to use major banks such as Bank of America for most exchanges. Usually, credit cards may 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. Even so, the terms are strict, and the cash advance fees may be hefty.
How Do You Buy Crypto with Credit Cards?
The first thing that you need to do is determine whether the credit card of your choice allows for cryptocurrency purchases or not – if it does, see what fees it charges. Does it have any cashback advance penalties that you must be aware of? If so, then this will help put your finances in order.
Once you found your credit card of choice, you will have to do some research on the exchanges. See which ones allow you to make a purchase using a credit card. These purchases may be rather tricky, which is why some major exchanges will not allow you.
Finish by funding your account using your credit card. The process is similar when you are funding a checkout payment with either a debit or a credit card. All you have to do is put down your credit card info and link it to your account.
Advantages and Drawbacks
The main advantage of using credit cards to buy crypto is that you can make your purchases even without cash. You may use the line of payment, which you can pay off later on. Plus, some credit cards can even lead to rewards after purchases.
The drawback is that credit cards are cash advances, which means high fees alongside your crypto exchange fee. Plus, if you don’t pay your debts on time, not only can you damage your funds, 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 the process is allowed for your credit card of choice, and that you have the funds to cover the payments.