Buy Bitcoin with Credit Card

Bitcoin, the pioneering cryptocurrency has already grabbed attention worldwide and introduced blockchain technology and decentralization to numerous companies and financial systems. Now, more and more commercial and industrial sectors are looking forward to implementing blockchain technology in their system and have already started conducting transactions through the crypto coins. Buying Bitcoin at this moment can prove to be beneficial even if developments are being made on the Bitcoin blockchain.

Buying Bitcoin through credit or debit cards is one way to purchase the virtual currency without facing any hassle. Another way of earning Bitcoin is through the cryptocurrency exchanges where people trade one currency for another. For instance, Bitcoin against US Dollars, and Bitcoin against Euro.

Points to Consider when Buying Bitcoin with Credit Card

  • Credit Scores: The credit utilisation ratio or the percentage of the credit limits of the credit card you are using determines your credit scores. Make sure you do not exceed your credit card to buy Bitcoin as it can have a negative impact on your credit scores. Even when you can pay off the debt, you should not exceed the limit as it will reduce your available credit for your future credit cards.
  • Transaction Fees: Credit card purchases of Bitcoin include several percentage points that determine the transaction fees. The process is quite different from the process of using a credit card at a retail store.
  • Foreign Transaction Fees: When an American credit card is used to buy Bitcoin from a crypto exchange with origins outside U.S., the credit card company may charge a foreign transaction fee. Usually, the fee is near about 3 percent but it is best to use a credit card that will not charge any foreign transaction fee.
  • Cash Advance Fees: The beginning of 2018 saw MasterCard and Visa terming the cryptocurrency purchases as ‘cash advances’. This results in higher fees as well as immediate interest accumulation. Moreover, as stated earlier cash advances classification does not receive introductory spending bonus or rewards. So, you should clarify this point with the credit card company and the selected exchange before making a purchase.
  • Debt: As you probably know, the market of Bitcoin and other cryptocurrencies is highly volatile. You may find yourself in debt if the market falls after the purchase and you do not have to pay back the credits.

When to Buy Bitcoin with Credit Card?

While it is often recommended to not buy Bitcoin with credit card when you are short in cash due to increased fees from the exchange and interest, you should consider doing it to gain more rewards. The credit card holders are often offered an introductory spending bonus to purchase Bitcoin. In such cases, usually the amount earned from the bonus is more than the extra fees charged for using credit card. Thus, it is a net gain for the buyer. In most of the exchanges allowing purchase of Bitcoin through credit cards, the Bitcoin will be delivered instantly. The card issuer must clarify the purchase of Bitcoin as such and not as a cash advance for you to receive the credit card spending bonuses.

2018 has made the process of buying Bitcoin with credit card easier. You simply need to know where to buy the crypto coin with credit card from, and to know it continue reading…

How to Buy Bitcoin with Credit Card?

  • Selecting a wallet: The wallet is the place where you will store Bitcoin just the same way you keep fiat currencies. However, this is a virtual wallet. The Bitcoin can be stored in an online, mobile or hardware wallet. It is essential to choose a wallet that has advanced security features and is easy to operate. There are exchanges that allow credit card purchase of Bitcoin, setting up a wallet for the buyers at the time of purchase. They may even ask the buyer to register for an account.
  • Choosing the exchange: Cryptocurrency exchanges are the hub of buying and selling the cryptocurrencies. But, not all crypto exchanges have the option of buying cryptocurrencies through credit cards. Coinbase, Coinmama, and Bitstamp are some of the exchanges that have this offer. Also, the fees charged depends on the limits set on buying and selling the cryptocurrencies.
  • Linking credit card to make a purchase: The exchanges that offer Bitcoin purchase with credit cards ask for the credit cards to be linked first.

Where to Buy Bitcoin with Credit Card?

Let’s have a glimpse at the places that offer Bitcoin purchase with credit cards.

Coinmama, a crypto exchange will charge a premium fee when you buy Bitcoin with a credit card from them. The plus point is that they have not yet set a limit on the maximum amount of Bitcoin one can purchase from the exchange. Known for its on time services, you will receive the Bitcoin immediately after the purchase. Coinmama also has a good support system. The process involves you selecting the amount of Bitcoin you want to buy from Coinmama’s homepage itself. Enter the price in BTC, USD or EUR or you can also choose one of the packages. The exchange asks the buyer to sign up and verification is done with a photo ID. However, up to $500 package does not require verification. Daily purchase with verification is up to $5000 while monthly is $30000. The minimum purchase is $60 USD. Coinmama will not allow you to keep the purchased Bitcoin in their wallet.

Credit cards allowed: Visa, MasterCard

Operating in U.S., Europe, and some countries in South America, CEX.IO offers Bitcoin purchase through credit card. You need to open an account and then click on “Wallet” and “Fund”, placed next to the request currency. After choosing credit card as the medium of buying Bitcoin, you will receive the requested amount instantly. The credit card must be linked to the CEX.IO profile for the purchase. Buying Bitcoin with credit card will see a deposit fee of 3.9%. CEX.IO also allows selling Bitcoin back to your credit card with a fee of only 2.9%.

Credit cards allowed: Visa, MasterCard

Hailing from Austria, Bitpanda allows Bitcoin purchase with credit card for EU citizens only. The exchange has comparatively low fees and the daily limitation is €2500 daily and €75000 monthly for credit card purchase if the account is verified. Otherwise, the daily limit is €10,000 while the monthly €300,000. Bitpanda usually charges 1.49% fees on the purchases but it may vary between 1.5% and 3.6% depending on the method of payment.

Credit cards allowed: Visa, MasterCard

Bitstamp accepts customers worldwide and is one of the pioneering Bitcoin exchanges. Bitstamp has recently started accepting Bitcoin purchase through credit card. Till now only the US and European citizens are eligible to buy Bitcoin from Bitstamp using credit cards. The exchange has not put any limit onto the purchase amount but the card issuer may charge an additional fee of 5%. You need to visit the deposit page and choose the credit card option and select Bitcoin. If the credit card purchase service of Bitstamp is applicable in your country, then proceed on to select the payment currency (USD or EUR) and the amount. After entering your credit card details click on ‘Submit’. The Bitcoin will instantly be credited to your account balance. The fee for credit card purchase of up to $500/€500 is 8%, $1000/€1000 is 7%, $2500/€2500 is 6%, and $5000/€5000 is 5%.

Credit cards allowed: Simplex, Visa, Mastercard

From IndaCoin, Bitcoin can be purchased through credit cards. The UK based exchange has a minimum amount of $5 while the upper limit for the first month is $500. The credit card can be used to purchase up to $3000 on a monthly basis after using the card for 40 days. When purchasing Bitcoin through credit cards from IndaCoin, you will need to verify with your phone number and the 5 digit code on your credit card statement. The site says that fee is not charged but the exchange rate due to credit card processing is quite high. You may have to create a new wallet if you do not have an IndaCoin account.

Credit cards allowed: Visa, Mastercard

The 247Exchange offers the option of buying Bitcoin with credit cards. The process demands verification. Depending on the level of client, the daily limit for credit card purchases range from $150 to $3000 while the monthly limit ranges from $300 to $30000. For Level 1 or ‘Guest’ the limit is $100. If you want more, you can apply for a custom limit. However, the exchange rates are quite high.

Credit cards allowed: Visa, Mastercard, Visa Electron, Maestro, China UnionPay

Changelly does not require verification for buying Bitcoin using credit card but, there is a base fee of 5% and 5% additional credit card processing fee through Simplex. The limit for the first transaction is $50, $100 for the next transaction that can be done after 4 days. $500 is the limit for a purchase done after 7 days of the first transaction. You cannot buy more than three times a week. However, there is no limit after that.

Credit cards allowed: Visa, Mastercard

All the exchanges mentioned here are popular worldwide and allow Bitcoin purchase with credit card through a beginner friendly process.