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4. How to buy bitcoin ?

How to Buy Bitcoin With a Credit Card

The process for purchasing Bitcoin with credit cards is similar to the one for buying the cryptocurrency with debit cards or through automated clearing house (ACH) transfers. You will need to enter your credit card details with the exchange or online trading firm and authorize the transaction. In general, however, it is not a good idea to purchase bitcoin with credit cards. There are a couple of reasons for this.

First, not all exchanges allow bitcoin purchases using credit cards due to associated processing fees and the risk of fraud. Their decision to do so may work out in the best interests of customers. This is because credit card processing can tack additional charges onto such transactions. Thus, in addition to paying transaction fees, you will end up with processing fees that the exchange may pass onto you.

The second reason is that credit card purchases can be expensive. Credit card issuers treat bitcoin purchases as cash advances and charge hefty fees and interest rates on such advances. For example, American Express and Chase both count purchases of cryptocurrencies as cash advance transactions. Thus, if you purchase $100 worth of Bitcoin using an American Express card, you will pay $10 (current cash advance fee for such transactions) plus an annual percentage fee of 25%. What’s more, the credit card company also limits you to $1,000 worth of bitcoin purchases per month.8

An indirect method of purchasing bitcoin using a credit card is to get a Bitcoin Rewards credit card. Such cards function like your typical rewards credit card except they offer rewards in the form of bitcoin. So, they invest cash back earned from purchases into bitcoin. An example of a Bitcoin Rewards card is the BlockFi Bitcoin Rewards Credit Card.9 Beware, however, that the annual fee on these cards may be steep and there may be additional costs associated with the conversion of fiat currencies into crypto.

Although exchanges like Coinbase or Binance remain some of the most popular ways of purchasing Bitcoin, they are not the only method. Below are some alternate ways to purchase the cryptocurrency.

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