Let’s say you want to explore new ways of making money in this era; You have a long list of potential businesses and investments to make money. Have you thought about adding cryptocurrency?
Your list won’t be complete until this addition. Although a highly volatile market, the recent fuss about crypto is likened to gold in the 1850s and dot-com stocks in the 1990s.
Crypto is having a moment as one of the hot commodities of the day, and more investors are seeking ways to buy. With the rise in popularity, and the opportunity for massive gains, persons with small budgets also seek ways to tap into getting the coins. The younger generations, especially.
In fact, a survey by finbold shows the number of Bitcoin millionaires to have risen to 72,483 as of January 2023. This represents a 61% increase from a recent study of the same subject.
In this age and time, buying cryptocurrencies cannot be any easier. There are different payment options to purchase them, including using your credit card. Do you want to know how to navigate the ever-volatile cryptocurrency market with a credit card? Keep on reading to find out.
Buying crypto with a credit card– what you need to know
Investing in cryptocurrency with a credit card is risky if you don’t have adequate knowledge about it. Credit card payment options are relatively new in the crypto world.
As of now, not all cryptocurrency exchanges accept it. So, the first thing to do is to research exchanges that let you buy crypto with your credit card. Moreso, research exchanges with the best deals in terms of fees.
For instance, on moonpay, you can buy ETH with a credit card. Noteworthy, your Visa or Mastercard are the two popular credit cards to purchase crypto. American Express and Discover are also good bets.
Interestingly, a typical credit card transaction requires you to authorize a merchant to pull payments from your account. This means transactions have to pass through financial middlemen. For instance, a Visa transaction involves five parties:
- The credit card network
- The merchant
- The acquirer (typically the financial institution that makes payments possible to the merchant)
- The individual cardholder
- The issuer (the cardholder’s bank).
In some other transactions, there is also a sixth party which is the payment processor. Furthermore, as an investor looking to buy crypto with a credit card, keep your credit card safe.
Here is why every day, we see improvements in technology. Hackers can hop on the numbers on your card to steal your funds. This happens if you allow merchants to store them for future access.
In any case, hackers can also access merchants’ records and play foul on your card numbers. It’s essential to be careful.
You can have your credit card transactions and buy your cryptos on your mobile device–as simple as that. It takes a few seconds to complete transactions. Other perks, such as borrowing money and reward points, come with it.
Steps to buying cryptocurrency with your credit card
The actual process of investing in cryptocurrency with your credit card is similar to any other online purchase. Although each platform has slightly different procedures while purchasing with a credit card, you can generally expect some steps in common.
Generally speaking, the first step would be to find a credit card issuer and a cryptocurrency exchange that allows credit card purchases. Once you have all those sorted, you can purchase your crypto.
Typically, you’d start by having an account with the exchange. Choose the currency and amount you want to purchase and tell the exchange where to send your coins.
The last part of the transaction would be to input your card information to complete the transaction. It is advisable to pay off your purchase as soon as it clears. This helps to limit the amount of credit card interest you’d typically incur on the transaction.
Here is a simple step for you to follow
● Register your account or log in: If you are an existing merchant, you only have to log in. Just setting up a new account? You’d need to undergo some identity verification before making any purchase.
● Choose the cryptocurrency you want to buy: You’d have to select the coin you want to buy. You’ve also got to choose your investment amount. Another thing is to be sure you can purchase that coin with a credit card.
● Choose a credit card as your payment method: Indeed, you’d have to complete a credit card verification process before your purchase can go through. Depending on the exchange, this process takes several days. But don’t fret. It is for the good of all the parties involved. Once the process is completed and your transaction goes through, you’re the latest coin owner in town. Sounds interesting.
Buying Crypto with your Credit Card—Pros
One significant advantage of buying cryptocurrencies with your credit card is the opportunity to invest. Imagine a new coin in the market with the potential to do well and yield returns. Credit cards come to your rescue if you want to invest but need more money. You don’t have to miss out on the investment.
With a credit card, you can invest. Regardless of how much cash you have. It also lets you take advantage of rewards you earn through spending that’s possible with a crypto reward credit card.
Another perk is the convenience that comes with it. You only need to ensure the process works for the credit card of your choice. More so, you have the funds to cover the transaction ready. You can always pay it off at a later time. Besides, utilizing the credit card method a checking account makes cryptocurrency fits into your overall financial life.
Buying crypto with your credit card–Cons
Purchasing crypto with a credit card could be dangerous if you don’t play it safe. The cryptocurrency market is volatile and unpredictable. You could lose your money at any slight market drag.
Using your credit card to purchase cryptocurrency could mean incurring debts for an uncertain investment. If the investment does not turn out well, you will still have to pay off the debts on your credit card.
In addition, depending on how much-associated fees you incur, your credit utilization could go up. High utilization could be a red flag to issuers and credit score algorithms. The more your credit utilization ratio soars, your credit score sinks. Due to this, some card issuers will only let you use credit cards to buy crypto. However, it is possible to take a cash advance from such issuers to buy whatever you like and later divert it into crypto.
The transaction fees on credit card transactions vary. There is usually a credit card processing fee and another for your pairing. In other cases, creditors also charge their own processing fees. While some investors consider this as high, some are cool with it.
So, if you ask if purchasing crypto with your credit card is a good investment, it is only a matter of choice. You’ve only got to play safe while doing it.
How do I navigate the crypto market volatility with my credit card?
The best way to avoid the risks that come with the volatility of the crypto market is to constantly educate yourself on how to invest in crypto safely.
It is no longer news that you must DYOR(Do your own research) and not follow what a friend or acquaintance tells you. Following investment trends and analysis from trusted authorities in the crypto space is vital.
Although not all calculations are accurate. However, they tell you how to play your safety cards. Also, keep your credit card away from unauthorized third parties. If you want to buy crypto with your credit card, only buy what you can repay.
To put things to a close now, you need to keep your FOMO(fear of missing out) in check. Don’t just jump on any new coin in town. Be careful to know the worth or track records of the coin you invest in.
Using your credit card to easily buy cryptocurrency should be a manageable investment. Hence, you’d bear the consequences alone. Digital assets are subject to unpredictable fluctuations in value and price. Only invest as much as you are willing to lose.
Despite the ease of buying cryptocurrencies, it is crucial to refrain from buying them with feelings. In recent times, investors with so much confidence in some coins have recorded many huge losses when they didn’t eventually do well. Don’t let that be you.
Author’s Bio
Ale Oluwatobi Emmanuel is a freelance SEO content writer for SaaS and web 3 brands. With several published by-lines in notable tech websites, he’s passionate about tech, and the innovations that come with it. In his leisure, he listens to music and plays classical piano. Reach Ale via [email protected]
