Buy Bitcoin With Credit Card

The Ultimate Guide To Buying Bitcoins With Credit Card

As a fan, user, or enthusiast in the crypto-verse, you should be aware that there are several steps in beginning your journey with Bitcoin, especially when you are entirely new.

Although it may be quite overwhelming in the first instance, at the end of the day, there is so much that you will have to take in. However, once you have all of the basics, running down Bitcoin’s hole is quite easy.

What you will be learning from this guide is how to purchase probably your first Bitcoin using a credit card. Nonetheless, so many people have asked the question that relates to what they need to purchase Bitcoin. Here it goes.

What You Need To Purchase Bitcoin

Before we delve into how you can buy Bitcoin with your credit card, you must know the necessary things needed to purchase Bitcoin. They include:

  • Digital Wallet

In a bid to carry out transactions on the Bitcoin system, users will need to operate a program known as a wallet. Since Bitcoin is technically not an actual coin, it only seems ideal that the Bitcoin wallet will not be practical. 

Rather than your standard leather wallets, bitcoin wallets are made up of two unique and single coded keys. These are public and private keys. 

Furthermore, the public key is known as the location wherein transactions are entirely deposited to and also withdrawn from. It is also the exact key that shows up on the Blockchain ledger as the user’s virtual signature. 

The private key is the password that is requested for when users want to purchase and trade their Bitcoin that is kept in a wallet.

  • Private documents

Currently, the United States securities, as well as the exchange commission, demand that users are to verify all of their identities when they are registering for virtual wallets. This is to be a part of the Anti-money laundering policy.

In a bid to purchase and trade bitcoins, you will have to validate your identity by making use of diverse private documents, which includes driver’s license as well as SSN; Social security number.

  • Secure web connection

If you have made up your mind to trade your Bitcoin on the web, you will need to use your discretion to go about where you access and exactly when you make use of your virtual wallet.

If you should trade your Bitcoin on a Wi-Fi that is either public or unsafe, you will be vulnerable to attacks from cyber hackers.

  • Bank account, debit or credit cards

Whenever you exchange your Fiat currency like US dollars or any other currency for bitcoins, you will need funds to carry out these transactions. Your Bitcoin wallets can be connected directly to either your debit card, credit card, or bank account. Be sure to find a bitcoin-friendly bank which will also let you buy bitcoin with a debit card or credit card smoothly.

  • Bitcoin exchange

Once you set up your wallet using a payment method, you will need an actual place to purchase bitcoins. Every user can buy Bitcoin and all other virtual currencies from the web marketplaces known as exchanges. 

These exchanges are very similar to those platforms where traders buy their stocks. What exchanges do is that they link you straight up to the Bitcoin or virtual currency marketplace where you can successfully exchange local Fiat currencies for bitcoins.

Exchanges For Purchasing Bitcoin With Credit Card

Generally, purchasing Bitcoin with either a debit or credit card was once very difficult to achieve. Fortunately, crypto companies such as CoinBase and Coinmama have made all of the processes to be not just smooth but swift as well.

Nonetheless, some of the exchanges where you can purchase bitcoins with your credit card include:

Coinbase

This is the globe’s biggest Bitcoin broker. When you get to Coinbase, you can purchase up to about one hundred and fifty dollars or euro of Bitcoin weekly and instantly with your debit card though in countries like: 

  1. The United States
  2. Europe
  3. United Kingdom
  4. Australia, and;
  5. Canada

At Coinbase, users are charged a flat rate of 3.99 percent fee on every purchase made with their debit card. This has been noted to be among the lower rate for both US and European customers.

To purchase bitcoins with your debit card in Coinbase, you can follow these steps which entail:

  1. Create an account and open it on Coinbase
  2. Link your debit card and add it to your profile on Coinbase
  3. Validate your identity and also do that in Coinbase
  4. You can then purchase your bitcoins

Some of the advantages of using Coinbase include:

  1. It has increased liquidity as well as purchasing limits
  2. It is a simple way for new users to have bitcoins
  3. There is an instant buy option made available with debit cards

As for its disadvantages, they include:

  1. The purchases carried out using bank transfers can take about five days to be completed
  2. CoinBase may likely monitor how and where you get to spend your bitcoins

These are just a few things to know about Coinbase.

Coinmama

This is a Bitcoin broker that specializes in allowing users to purchase bitcoins using either a debit or a credit card. 

However, users are charged a minus six percent fee as a result of the risks as well as processing fees that comes with payments via credit cards.

With Coinmama, there are increased limits, and you can purchase about five thousand dollars worth of bitcoins daily and twenty thousand dollars worth of Bitcoins monthly.

Once you have your verified account and your purchase is carried out, you will get to receive your bitcoins in minutes. As expected, Coinmama is made available in specific states in the US.

The advantages of making use of Coinmama include:

  1. It works in almost all regions or countries
  2. It has increased limits for purchasing bitcoins using a credit card
  3. It is a dependable and trustworthy broker

As for its Disadvantages, they include the fact that some of the maximum fees are actually among the credit card or debit card Bitcoin crypto brokers

Luno

First and foremost, you should have it in mind that Luno enables its users residing in Europe to buy bitcoin using their credit cards. Also, the company is known to provide meager fees too. 

Its advantages include:

  1. It is a highly trusted exchange that has been available for quite a long period
  2. It comes with free deposits and a reduced withdrawal fee

As for its disadvantages, it has been advised that users should never store their Bitcoin on the wallet service provided by Luno.

Bitpanda

This is a Bitcoin broker that is located in Austria. Users can get to buy coins with their credit cards for a three to four percent fee. However, only users residing in Europe can make use of Bitpanda

Have it in mind that the fees are not being publically displayed but shown on the buy price whenever you complete your purchase.

Its advantages include:

  1. It is rated as having some of the lowest fees that are used for purchasing bitcoins with credit cards
  2. It is dependable and trustworthy

As for its disadvantages, its fees are not openly displayed in its site but displayed in its purchasing piece.

CEX.io

This exchange allows users to purchase bitcoin with a credit card, and it is among the oldest Bitcoin exchanges which work in Europe, the US, and some of the countries located in South America.

The verification process of CEX.io is quite extensive, and it can take about thirty minutes to complete. Its advantages include: 

  1. It supports lots of countries as well as regions
  2. It has a low trading fee percentage at 0.2%
  3. It is an established and trustworthy exchange

As for its disadvantages, its verification procedure requires so much private information, which includes the user’s photo, and it incurs a very long delay. Also, its GBP market practically lacks any form of liquidity.

How To Get Bitcoin With A Credit Card

When you want to get started, you can easily visit a buy bitcoin page. Also, you should ensure that you have the Bitcoin wallet address set to transfer the Bitcoin to once you purchase it.

Immediately you have it ready; you can begin the process to purchase your first Bitcoin. What is needed is for you to enter the exact amount in USD that you want to buy. It is the job of the page to convert the price you input to Bitcoin.

The next step you will take is to click on the button that indicates the next step. You should note that, if you live in an area that is not backed up for automatic credit card purchases, you will be shown a message that will advise you on this.

Furthermore, should this happen, you can purchase Bitcoin through any Bitcoin exchange that you will find. The next page you get to see is known as the billing page.

Here, you will input all the credit card billing information for you to submit all of your payments to buy bitcoin. The majority of main credit cards like Visa and MasterCard are accepted as well.

When you go through the whole steps, the payment procedure is finalized. It is quite easy at the end of the day.

The next thing that gets to happen is that, once the payment is finally processed, the Bitcoin amount that you bought will be transferred straight to your Bitcoin wallet address.

Moreover, the process is usually completed in an hour, and should it take longer than this; it will depend on the credit card company you are making use of and the Bitcoin transaction confirmation time.

Furthermore, an email will be steadily sent to your provided email address. This is to confirm all of your transaction details. When the Bitcoin is received in your wallet address, you can do all you want with it.

Meanwhile, you can choose to hold on to it as your wallet address, or you can do anything you desire with it. It can be held as a speculative asset, or you can easily spend it in diverse places.

Things To Consider When Purchasing Bitcoin With A Credit Card

When you make up your mind to purchase Bitcoin through credit cards, there are some things that you are meant to consider. They include:

  • Its effect on your credit scores

Before making your move, you should consider how much of your credit you will be making use of. Your credit utilization ratio, which is the percentage of all of the credit limits that you use, is a huge factor in calculating credit scores. 

On a general note, the more credit that is available that you make use of, the lower your scores get to be. And so, when you max out all of your credit cards to purchase bitcoins, it could have a negative impact on the credit scores. 

Although your scores will get to bounce back once all debts are paid off, you should not decrease all of your available credits if you are going to apply for a new credit card, mortgage, or auto loan.

  • Transaction fees

Whenever you purchase an item in a store, for instance, the retailers get to include a credit card processing fee into the prices. Likewise, when you buy Bitcoin, you will need to expect diverse percent points to be tacked on any of your purchases. 

  • Foreign transaction fees

If you make use of an American credit card to purchase bitcoins on an exchange that is based outside the United States, your card issuers may get to charge for a foreign transaction fee.

Although this fee is equivalent to about three percent, it is effortless to avoid at the end of the by making use of a card without the foreign transaction fees. 

  • Cash advance fees

In the early parts of 2018, both MasterCard and Visa began grouping virtual currency purchases under cash advances. This does not only mean increased fees, but it also signifies that interests will begin accruing at once.

Also, it aids in preventing users from gaining rewards on any of their purchases. Before you purchase bitcoins, you should endeavor to research exchanges and credit cards in a bid to find out if your purchase will be classified as a cash advance.

  • Debt

It is no news that bitcoin and so many other virtual currencies are volatile. If you purchase bitcoins with money you do not have, and the price crashes all at once, you can find yourself up on a prominent creek without any paddle. 

We can advise against purchasing Bitcoin on credit cards unless you can fully pay it off on that exact month.

However, if you are making use of credit cards to get rewards, that is fine. But if you will be using your credit card just because you cannot afford bitcoins, you can as well wait until you can afford it.

Pros Of Purchasing Bitcoins With A Credit Card

Just like most purchases, the most significant advantage of purchasing bitcoins with your credit card is earning some rewards. However, you should be very sure that your purchase is not classified as a cash advance. 

What this means is that, if it is grouped under cash advance, you will not be able to earn any reward. Another reason why most people purchase bitcoins using their credit card is simply for monetary leverage.

Basically, if a user’s Bitcoin buy is being treated as a purchase and not as a cash advance, the credit card will allow the user to make use of huge credit lines to profit from large price swings prospectively.

Note that you should be careful if that is the reason why you are purchasing Bitcoin with your credit card. In every corner of the world, spending much more than you can afford can land you in massive credit card debt. 

Do You Need A New Credit Card?

So many people have asked if they should get a new credit card instead of using the old one to purchase Bitcoin. It is best to bear in mind that, there are not any credit cards available for now that provide extra rewards for buying bitcoin or cryptos. 

And so, if you have plans on buying a specific amount of Bitcoin and you have almost perfect credits, applying for a newer credit card can earn you both a sign-up bonus and rewards from your spending itself.

Also, if you get to time it correctly, you can come straight ahead in the value of your rewards. Importantly, cash advance transactions do not mostly count towards any introductory bonuses.

So, should your credit issuer get to treat virtual currency purchases as cash advance, you are likely to miss out on all those great rewards.

Furthermore, if you have decided to apply for a new credit card to purchase Bitcoin, you should search for the one that will fit perfectly into all of your spending needs, and that will offer some benefits right after you have attained the introductory bonuses.

While purchasing bitcoin with your credit card seems like an intelligent move, you should critically think before delving into the whole digital currency rave.

Though it is quite an exciting industry, however, it is quite unpredictable, and it is not worth getting into debts over. 

Furthermore, your limits for purchasing Bitcoin using a credit card are quite low on so many sites. This is because the trader’s processing services expect sellers to take precautions in places in a bid to restrict fraudulent activities. 

Also, setting strict limits is among the simplest things that a trader can do asides from asking for a photo id to show that they are taking fraudulent issues seriously. 

Users who are interested in buying more bitcoins than a trader will normally enable will have to do so with their credits by using diverse exchanges and then withdrawing the currency into a particular wallet.

Also, Bitcoin crypto on its own charges a transaction fee whenever users send money, and the transfer is not automatic though; it is swifter currently than it was years back.

Moreover, your ideal option may just be to set up purchases by the week or monthly with a distinct provider and actively build up your investment if you practically have the time.

As an option, you can take a look at other payment alternatives like PayPal or a bank transfer that will be seen by almost every exchange as being trustworthy.

Additionally, you may be interested in the exchange that best suits you. There are quite a large number of crypto exchanges that are available, which you can select from, although you may find it challenging to get the best. 

Nonetheless, some of the things you should take into consideration before making purchases for Bitcoin with your credit card on crypto exchanges include:

  • Be aware of the scheduled transaction
  • Know their minimum and of course, maximum spending amounts
  • Be mindful of their commission 
  • The charges they take for every transaction
  • Their currency options
  • Their payment methods
  • Cryptocurrency and token options
  • Their availability in the region you reside
  • How friendly their user interface is, and; 
  • The speed in which transactions are cleared up

There are so many reasons why diverse exchanges are made available out there, but the price is not the only factor that matters here.

Note that, the major difference in the conversion rates between a majority of these exchanges is quite marginal, and it relies on the amount you get to spend.

To Wrap It Up

Nevertheless, in all you do, you should ensure that you are not running up a high balance on your credit card, and you do not let it stand from one month to the next. 

No one makes so much with bitcoin if they end up borrowing high-interest cards to pay it off. Ensure also that you are on top of your budget, and you pay off your priority debts before you begin the journey of investing. 

Moreover, if you require monetary aid or guidance to pay off all debts, there are so many free agencies that can help you sort these things out.

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