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Learn Where & How to Buy Bitcoin With Credit Card - A Beginner's Guide

Bitcoin Credit Card

Bitcoin is the most popular cryptocurrency with monetary value. An unknown group or person using the name Satoshi Nakamoto invented the digital asset in 2008 and mined the genesis block on the 3rd of January 2009. It is a decentralised digital currency that surpasses expectations.

Credit cards enable the holders to pay for goods and services based on the promise to the card issuer to pay them the amount and interest later. Today, you can buy and sell Bitcoin with your credit card from many crypto platforms across the world without difficulty.

Steps to Buy Bitcoin With Credit Card

Buying Bitcoin with credit cards was incredibly hard a few years ago. However, in 2020, many crypto companies have made the process easy. Here are the 3-easy steps that you should follow:

  1. Ensure your credit card is active: Before you start the transaction, ensure that your card is active. It should also support the purchase of Bitcoin. Visa and Mastercard are some of the best companies that allow you to send and receive Bitcoins. In case you do not have the card, ensure that you have all the vital details, including card number, security code and expiry date.
  2. Create a Bitcoin wallet: There are several excellent Bitcoin wallets. Choose one that has your preferred security features and is affordable. Bitcoin.com offers some of the best options.
  3. Register with a Bitcoin exchange: Find a secure cryptocurrency exchange where you feel safe to buy Bitcoins. Find out what they want from you. Have your photo ID ready. Pay the seller using your credit card and let them send the assets to your Bitcoin address.

If you are ready to buy from a peer-to-peer marketplace, you can do some research online. Then look for individuals or organizations that accept it for buying Bitcoin. Please note that some exchanges also allow you to buy directly on their site with credit cards.

Pros and Cons of Buying Bitcoin With Credit Card

Pros

Allows payment with fiat currencies
Fast payment processing
User-friendly
A regulated form of payment
Can buy even if you don't have cash
Don't have to go through third-party websites
Ideal for beginners
Fast and efficient
Protect personal information
Ensures transparency
Acceptable across the world

Cons

Higher transaction fees
Purchase limits on cards
No anonymity
Some exchanges do not accept it
May go into debt if the value of the coin fluctuates

What Are the Transaction Fees on Credit Cards?

When buying cryptocurrency, bear in mind that transaction fees on credit cards often vary greatly. Credit card issuers have different pricing policies, and that reflects on the fees. Different trading platforms also charge different rates. The best way to know the transaction fees that you should pay is to check with the card issuer and the trading platform that you are planning to use. 

As we have mentioned, there are several types of credit cards. That means it is difficult to provide a full list of the transaction fees you are likely to pay. However, when purchasing Bitcoin with a credit card, you should bear in mind that most companies charge approximately 5% of the total amount of currencies you buy. But others will charge you as high as 10%. Mastercard charges an average processing fee ranging from 1.55% and 2.6%, and Visa charges are between 1.43% to 2.4%.

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BTC to Credit Card: Can I Transfer Bitcoin to Credit Card?

If you want to sell Bitcoin, you can go ahead and do that, but you must follow the right process. You can do the transfer directly. To start with, you need to register on a Bitcoin trading platform of your choice. You can transfer the assets to your credit card directly. If this is not possible for you, use an alternative method. Typically, credit cards do not need to be credited for you to use them. However, if you transfer your Bitcoin to your bank account, you can go ahead and withdraw it.

Once you have created an account on your trading platform, add your credit card information and confirm the action. Buy or transfer the Bitcoin in the wallet and receive the funds into your credit card. After that, you can go ahead and withdraw the money from your credit card. Many people say this is not recommended due to the high charges. However, in this case, the charges are relatively low since the bank will not be offering you a cash advance, as is always the norm. In this case, your card is functioning like a debit card to buy Bitcoin. Remember to follow your platforms' instructions as the procedure may differ depending on your chosen Bitcoin exchange site.

Your platform will most likely require a photo ID or proof of residence. So, make sure you have them ready if you want to transfer your Bitcoin to your credit card. Transferring Bitcoin to a credit card fund is not your thing if you want anonymity. Both platforms will keep transaction records. But you can see this as an advantage as it limits your chances of falling victim to scams.

Credit Card to Bitcoin: Is It Possible to Convert My Credit Card Funds to BTC?

Unlike many payment methods, major companies allow people to convert credit card funds to BTC. Some credit card companies have banned users from some geographical locations from investing in gambling and forex.

But purchasing Bitcoin when you have some funds in your credit card is easy. It is essential to identify exchanges that can convert the fiat currently into the digital asset. Some of them provide built-in wallets where you can hold your Bitcoins for a while as you wait for its value to rise.

Since credit card companies are registered and responsible, the chance of having your money reversed is close to nil. Start by selecting a secure crypto exchange. Once the company has received the funds, they will send the Bitcoin to your wallet.

Frequently Asked Questions

  1. If you follow the right steps, it could take you between 5 and 10 minutes. Start a new transaction and authorise the credit card. After that, transfer the crypto coins to your trading platform. You will then receive your money within 1-to-5 days, depending on the bank's processing time.

  2. Whenever you want to convert your BTC to credit card funds, you should bear in mind that the service typically comes at a cost. All the involved parties must make some profit to remain in business. Here are the types of fees that you need to bear in mind: Bank transfer charges: The processing bank will charge a small fee to deliver your credit card funds. Trading platform fees: The platform also takes some fee for providing the service. Bitcoin transaction fees: This is the amount that is charged to your crypto wallet. Bitcoin miners receive it for confirming your transactions.

  3. Bitcoin is among the digital assets that fluctuate a lot. So, it is best to use the dollar-cost averaging strategy if you want to make a profit. This means that you can buy the coins when the price is low and sell when it increases for the best outcome. Remember that many people lose money when investing in these kinds of assets due to their hyped price-increase expectations. If the price has significantly dropped and you objectively expect it to increase in the coming days, you can use your credit card to buy the coins. This way, the high cost of using credit cards to buy digital currencies will not stop you from making a profit. Of course, it is best to invest the amount you can afford to lose due to the volatility risk.

  4. When you use a credit card to buy Bitcoin, you must be prepared to repay the principal plus an agreed additional charge. Remember, you are not required to deposit funds on the card to be able to use them. However, limits are always put on the cards. Despite these drawbacks, many people are still using these cards for a good reason. If you want to buy Bitcoin but do not have money, credit cards are your best reliable source of funds. All we are saying is that these cards allow you to trade when you have no purchasing power but need to continue investing or using Bitcoin.

  5. Speed is vital in the buying and selling of Bitcoin. So, it is fair to want to know whether you can use credit cards to buy bitcoins instantly. The answer is 'yes'. You can buy instantly, but that is only applicable if you go through CFD's brokers rather than a traditional Bitcoin exchange.

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