It is now simple to buy cryptocurrency since numerous forms of payment that were not accepted while cryptocurrency was in its infancy are now recognized and can be used to make purchases. The tried-and-true method of payment through credit card is preferred by a lot of investors because it provides a high level of security and makes the purchasing process much simpler.
This article is for you if you intend to open an account with an online cryptocurrency exchange and get started making investments right away. Buying cryptocurrency using fiat cash may be accomplished in a variety of ways, including the use of credit cards. Credit cards may provide ease and swiftness of transaction, but they also come with their own set of concerns. When instant buy cryptocurrency, some customers like transferring funds from their wallets or banks.
Although the prices associated with these methods are the most affordable, users who prioritize ease and swiftness may find them inconvenient. Credit cards are the best choice to make in this scenario. Check with your credit card issuer and payment network to see whether they support the sort of transaction you want to make before you try to purchase cryptocurrency using your card. The reasons for credit card providers’ refusal to allow cryptocurrency purchases are many.
What Are the Numerous Variations of Credit Card Fees, and How Do They Work?
There is a wide variety of fees associated with credit cards. In the following, we have included a summary of the most frequent fees that, depending on your circumstances, you may be required to pay.
- Costs of transactions
Transactions made with credit cards or debit cards often incur a nominal fee when using a cryptocurrency exchange. This is often greater than the fees associated with other common payment options such as bank transfers.
- Charges for cash advances
When you borrow money straight from your credit card issuer, this is referred to as a cash advance. You should expect to spend between 3 and 5 percent of the total amount in fees. For instance, a cash advance of $200 might result in costs ranging from $6-10. Some purchases made with cryptocurrency on credit cards are handled as cash advances. If you pay your monthly debt in a timely manner, most credit cards will give you a grace period of twenty days to pay off any purchases you make with the card. However, interest begins to collect on cash advances on the very first day they are used.
- Fees associated with foreign transactions
Users are likely to be charged a foreign transaction fee when they purchase cryptocurrency with US dollars using a credit card on a site that is headquartered outside the US. This situation also applies to individuals whose credit cards are issued domestically but who purchase cryptocurrency using another kind of fiat currency issued by a different country. The percentage of the transaction amount that goes toward fees for international financial dealings is normally somewhere around 3 percent. If you acquired $1,000 worth of bitcoin, for instance, the charge that you would pay would be $30.
Read more: How to Trade Cryptocurrency and Make Profit – The Best Cryptocurrency to Invest in 2022
A Walkthrough of the Step-by-Step Process of Buying Cryptocurrency with a Credit Card
STEP 1
Head on down to a crypto trading platform that deals with real-time currency transactions.
STEP 2
Until you are allowed to log in, you will first have to validate the information that was entered into your account, which requires you to first register an account.
STEP 3
Thereafter, you will be given the option to choose the mode of payment that is most convenient for you. To add a new payment method, choose the option that is labelled “Add a Payment Method.”
STEP 4
At this point in the setup procedure, you will be required to enter either a bank account or a credit card. Select “Credit Card” from the drop-down menu under “Method of Payment” when making your selection.
STEP 5
Make sure that the identity that you are using is accurate. Confirming your identity as the person in question is necessary. Simply click on the link provided to submit your identification.
STEP 6
The subsequent stage needs you to either upload the document using the camera on your mobile device, your desktop webcam, or a file. First, create the one that caters most closely to your requirements, and then submit the document.
STEP 7
Just after validation has been accomplished, you will be prompted to enter the information for your credit card, at which point you will be able to choose the “Add Card” option. You are now able to buy Bitcoins by navigating to the “Buy/Sell” option on the website and selecting “Cryptocurrency” as the currency of your choice from the drop-down menu.
STEP 8
After you have finished making the payment, the proportion of bitcoin that corresponds to that amount will be sent to the wallet that you have supplied. In a few minutes, the updated balance on your account will reflect the addition of the funds that have been sent.
Why Should You Buy Cryptocurrency Using a Credit Card Instead of Cash?
After you have gained an understanding of the expenses that relate to using a credit card, we will now discuss the many advantages of using a credit card to purchase cryptocurrency, many of which outweigh the disadvantages.
Use credit cards to invest even if you don’t have any cash on hand
Every crypto user is aware that the market changes at a rapid pace. A few days might be the difference between purchasing a coin at its lowest price or, even worse, at its highest price. It’s possible that you’ll be paid sometime during the following week. When you use a credit card, you won’t need to be concerned about whether you have sufficient cash on hand. Just make sure that all your expenses are paid off before the end of the month to prevent any interest charges from your credit card issuer.
Quick and without delay
The speed and convenience of credit cards makes it simple for first-time purchasers or investors to buy cryptocurrency using traditional currencies. The completion of a purchase with a credit card takes just a few seconds.
Read more: How to Determine Your Cryptocurrency Portfolio’s Profits and Losses?
On the other hand, it typically takes anywhere from three to eight days for bank and wire transactions. Because of this, the bitcoin cannot be removed from the exchange until the transaction is fully processed. A credit card is an excellent solution for investors who are interested in buying the drop rapidly in a bear market because of the immediate quickness it provides.
Beginner-friendly
Beginners who don’t want to struggle with the complicated processes on more sophisticated cryptocurrency exchanges often find that paying using credit cards is the best option for them. Utilizing a credit card for payment is a tried-and-true practice, particularly for crypto newcomers. Simply input your card number, the expiration date, and the CVV code, and you will be good to go. Additionally, cryptocurrency exchanges and systems that allow the use of credit cards are often quite user-friendly and straightforward.
Participate in betting to accumulate incentives
This is a frequent misunderstanding, and the answer to it relies on how you use your cryptocurrency and how much you spend on transactions using your credit card that include cryptocurrencies. Now, several crypto financial products, such as staking, give dividends that are quite appealing. These goods may be an effective method of generating passive income for certain people.
The Bottom Line
One of the various methods to purchase cryptocurrency is using a credit card. Credit card transactions are straightforward, fast, and do not need the presence of cash; nevertheless, the associated transaction costs are greater. A bank transfer is an option for those who would want to take advantage of a method that is less expensive. However, in contrast to credit cards, processing times for bank transfers are often measured in days. It is important that you educate yourself on the benefits and drawbacks of each payment option before selecting one that is appropriate for your needs.