Buy Cryptocurrency With Credit Card Reddit

Buy cryptocurrency with credit card reddit

Buy cryptocurrency with credit card reddit

Many Americans are intrigued by the idea of investing in Bitcoin and other cryptocurrencies, but doing so with a credit card is risky.

A recent study by global investment platform eToro found 43 percent of millennial online traders trust crypto exchanges – platforms where you can buy and sell cryptocurrencies — more than the U.S. stock exchange. Also, 71 percent of millennials who don’t invest in cryptocurrencies would do so if a traditional bank offered the option.

With crypto sparking so much interest, some exchanges offer the convenience of buying cryptocurrencies with a credit card.

However, some experts say “Not so fast.”

Investing in cryptocurrency: What you should know

Cryptocurrencies are virtual currencies that can be used to pay for goods and services just as you might use dollars, euros or pesos.

They fluctuate in value, so if you buy a cryptocurrency there’s a chance it can rise in value, making you a lot of money, or it could lose value, leaving you in possession of something worthless.

At its height, one Bitcoin – the most well-known cryptocurrency – was worth $20,000; today the price hovers in the $5,900 range.

When you buy cryptocurrencies, they are stored and tracked in a digital wallet until you’re ready to sell them. A “blockchain” is a record of all cryptocurrency transactions that are made.

Unlike other currencies, cryptocurrencies aren’t backed by any governments; nor are they regulated by financial institutions.

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In fact, some governments have warned their citizens about the risks of investing in cryptocurrencies for that very reason.

However, some disagree, pointing out that the speculative nature of cryptocurrencies makes them an appealing component of a long-term investment strategy.

“Cryptocurrencies are very volatile; however, this also means they have a good chance to appreciate,” says Kirill Bensonoff, a crypto advocate and entrepreneur who has been an active member of Boston’s blockchain community.“If you have an appetite for risk, crypto should be in your portfolio.”

If you decide to buy cryptocurrencies, you’ll need to find an exchange, many of which let consumers pay with a credit card.

If you’re thinking of going that route, here’s what you should know.

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Finding a crypto-friendly credit card

While crypto exchanges such as Coinmama, CEX.IO and Bitstamp let consumers use a credit card to buy cryptocurrencies, finding a credit card issuer in the U.S. that will let you buy them is another matter.

Last year, several of the biggest card issuers, including Bank of America, Chase, Citigroup, TD Bank and Capital One all banned the purchase of cryptocurrencies via their credit cards.

Buy bitcoin with credit card reddit

Wells Fargo joined the list last June and Discover’s then-CEO David Nelms last year cited fraud concerns as one of the reasons the card issuer has banned crypto purchases using credit cards.

However, you may have better luck with some smaller banks or credit unions that have not officially banned the practice of buying cryptocurrencies with a credit card.

American Express allows you to purchase cryptocurrencies, but in very limited circumstances, says representative Melissa J.

Irb invit fund ipo subscription

Filipek.

“In a similar way our card members can link their card to certain digital wallets, they can also link their U.S.

consumer cards to an Abra wallet and load a modest amount of money,” Filipek says.

Credit/Debit Card Bitcoin Exchanges

“The limit is $200 a day, up to $1,000 a month. Abra’s wallet can, in turn, be used to purchase Bitcoin in U.S. dollars.”

See related:Bitcoin credit cards? Mastercard patent suggests it’s possible

Weighing the pros and cons

If you’re thinking about investing in anything with a credit card, it’s important to go in with your eyes wide open, experts say.

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The U.S. Securities and Exchange Commission in 2018 issued an alert warning investors that using a credit card to invest comes with a number of risks.

Buy cryptocurrency with credit card reddit

For example, some scammers pressure investors to use credit cards to fund their investments, the SEC says.

The pros of buying cryptocurrencies with a credit card include being able to invest regardless of how much cash you have on hand and being able to take advantage of rewards earned through your spending.

However, there are many downsides.

For one, the interest owed if you don’t pay off the balance at once could eat into your investment returns.

If your credit card issuer charges a transaction fee, that too could take away from your profits.

Buy cryptocurrency with credit card reddit

Then there is the possibility of damage to your credit score if you find yourself unable to pay off the balance or make payments on time.

Some may think they can avoid credit card interest by using a 0 percent promotional offer, but that too can be problematic, says Melinda Opperman, executive vice president at Credit.org.

“You would need the investment to pay off quickly before introductory rates expire and you’re hit with those high rates,” Opperman says.

You would need the investment to pay off quickly before introductory rates expire and you’re hit with those high rates.

Another drawback is that a lot of crypto exchanges charge hefty service fees, Bensonoff points out.

For example, CEX.IO charges an extra 2.99 percent to make crypto purchases using a credit card, while Bitstamp charges 5 percent on top of whatever your card issuer might charge.

There are also scams surrounding cryptocurrencies.

Buy cryptocurrency with credit card reddit

According to crypto security firm Ciphertrace, crypto-criminals made off with more than $356 million from exchanges in the first quarter of this year.

Last year, the Tennessee Department of Commerce & Insurance warned consumers there is no guarantee a cryptocurrency will increase in value and to beware of cryptocurrency investment opportunities that are being aggressively marketed through social media.

Bottom line: Investing is risky by nature. Do you want to risk your credit profile along with your money?

“If you put a short ticking clock on your investments by gaming the credit card system, you’re setting yourself up for painful failure,” Opperman says.

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Buy cryptocurrency with credit card reddit