Buying bitcoin with credit cards works similarly to buying it with debit cards or via automated clearing house (ACH) transfers. You must submit your credit card information and authorize the transaction with the exchange or online trading firm. Purchasing bitcoin with a credit card, on the other hand, is generally not a smart idea. This is due to a number of factors.
- First, due to processing fees and the danger of fraud, not all exchanges allow credit card purchases of bitcoin. This option may turn out to be in customers’ best interests. This is due to the fact that credit card processors can tack on extra fees to such purchases. As a result, you will have to pay processing fees in addition to transaction fees, which the exchange may pass on to you.
- The second reason is that using a credit card might be costly. Bitcoin purchases are treated as cash advances by credit card companies, which impose high fees and interest rates. Purchases of cryptocurrency, for example, are treated as cash advances by American Express and Chase. As an example, if you buy $100 worth of bitcoin with an American Express card, you’ll pay $10 (the current cash advance fee for such transactions) plus a 25% annual percentage fee. Furthermore, the credit card provider places a monthly restriction of $1,000 on bitcoin purchases.
- Obtaining a Bitcoin rewards credit card is an indirect means of acquiring bitcoin with a credit card. These cards work in the same way as a regular rewards credit card, except that the rewards are in bitcoin. As a result, they put the money they get back from purchases into Bitcoin. The BlockFi Bitcoin Rewards Credit Card is an example of a Bitcoin rewards card. However, keep in mind that the annual fees for these cards can be high, and there may be additional costs involved with converting dollars to cryptocurrency.
What Are the Procedures for Buying Bitcoin?
To buy bitcoin, you must go through four steps: choose a venue or exchange to place your order, choose a payment method, and ensure safe storage of your money. There may be extra phases in the procedure depending on the type of venue selected in the initial step. If you buy bitcoin through Robinhood, for example, you may need to factor in additional charges for an online wallet and bitcoin custody because it does not provide these services. Get additional info at www.pocketoption.com.co.
