Cryptocurrencies are traded on exchanges that are designated for them.
These centralized or decentralized platforms, depending on your preference, are mainly used to either buy, sell, or trade crypto assets.
As an investor, you must be thinking, “How do I buy Bitcoin or other cryptocurrencies using a credit card?”
This is what we will be looking at in this article.
Buying a cryptocurrency using a credit card involves entering the details of your card, which includes the card number, card verification value (CVV), and expiration date, on the exchange’s checkout page.
Once this process is complete, you will receive the value of Bitcoin or any other cryptocurrency of choice on your subsequent crypto wallet.
Though this process is quick and easy, there are several factors that investors must consider before purchasing crypto tokens with credit cards to ensure that they are doing it correctly.
How To Buy Crypto With A Credit Card?
Buying cryptocurrencies using a credit card can be a relatively easy process.
However, there are several factors, such as the type of credit card and if the exchange you are buying them on supports it, that you must consider.
- Research About the Credit Card
If you are planning to buy cryptocurrencies with a credit card, the first step is to research whether the card and payment service provider supports the purchase.
Here are the credit cards that currently support crypto purchases:
You should keep in mind that each card demands its unique fees for making the transaction. By researching, you will get to know the fee structure the payment companies charge.
- Research the Exchange
Not every cryptocurrency exchange supports the purchase of crypto assets using credit cards.
Even if they do, it may not be straightforward due to the validation process employed to ensure that there is no fraud involved.
Exchanges that don’t accept credit cards simply use peer-to-peer (P2P) to transfer the cryptocurrencies that you bought into your wallet.
For these reasons, it is important to do due diligence to know which crypto exchanges support credit cards.
Here are some popular exchanges where you can buy crypto using credit cards:
- Link Your Credit Card To The Exchange
Once you’ve found the right exchange platform and card service that meets your requirements, it is time to verify your account by meeting the exchange’s know-your-customer (KYC) procedures.
After the KYC is completed, the next step is to link your credit card to the exchange.
This is a rather simple process that involves entering your name as it appears on the card, the card number, CVV, expiry date, and billing address.
- Buy Crypto
If you have linked your credit card to the exchange, it is time to make your purchase.
To do this, choose the crypto you wish to buy, enter the amount you desire, and then choose the option to pay with your credit card.
Now, you will be redirected to your bank’s one-time password (OTP) transaction page.
The OTP will be received as an SMS on the phone number connected to your bank account.
Enter the number to confirm the transaction and then wait to get the crypto deposited into your wallet.
Factors to Consider When Purchasing Crypto Using a Credit Card
When purchasing Bitcoin or any other cryptocurrency through an exchange, you should keep in mind that the trading platform may charge a fraction of the transaction cost.
Since the crypto market is a highly volatile place, there are several risks associated with buying them with credit cards.
- Debt
Cryptocurrencies are extremely volatile and credit cards use debt to make purchases.
This means that you will owe money to the bank that you may have used to buy the cryptocurrency of your choice with the credit card.
- Fraud
Choosing the right cryptocurrency exchange to buy or sell crypto is extremely important.
You cannot risk giving away your personal and card information to a fraudulent platform that may use the data to exploit you.
- Cash Advance Penalities From the Card Issuer or Bank
As is the case with withdrawing funds from an ATM, your credit card issuer is likely to consider cryptocurrency purchases as a cash advance.
Here are a few risk factors that you should consider when buying crypto with a credit card:
