Everyone seems to be talking about Bitcoin these days. I’ve written a lot about my investments in Bitcoin and other coins, and one of the most common questions I get asked is which exchanges I use.
For this post I want to talk about how to go about buying bitcoin with a credit card and some of the advantages/disadvantages of doing so.
The advantages of instant credit card buys
The biggest advantage I see is convenience. One of the problems many people face when getting into crypto is converting fiat into bitcoin. It can often be a lengthy process and wire transfers tend to take many days. Credit card purchases on the other hand are instant. This is particularly useful if you’re looking to take advantage of a market move, and want to get in before the price changes.
I’ve used credit card buys via coinbase to purchase one crypto, transfer it to an exchange and buy an alt coin. All within a matter of minutes. Something I couldn’t have done if I was using a wire transfer.
So the advantages are speed and convenience. But what about the disadvantages…
The disadvantages of buying bitcoin with a credit card
The disadvantage is cost. It’s usually quite expensive. Coinbase charges quite a high fee for credit card purchases – this is because they need to cover the credit card fees, as well as the risk associated with chargebacks and fraud.
Fees can eat into your profits. Personally I’ve found that in the grand scheme of things, because crypto gains have been so massive, the fees are trivial in comparison. You could also find an platform such as eToro which doesn’t charge credit card processing fees.
How to Buy Bitcoin with a credit card
Here are three different ways to buy bitcoin with a credit card that I came up with. One of them (mining) is a tad creative as you’re not directly buying bitcoin, but the end result is the same – more bitcoin.
Buying on an Exchange
There are only a few exchanges that offer credit card processing. And to be honest, I would avoid most of them. Coinbase is one place I do trust, and it’s where I buy most of my cryptocurrency. They allow credit card buys depending on your country.
When you buy bitcoin on Coinbase, it’s added to an online wallet. From there you can transfer it to a non cloud based wallet, another exchange (to purchase alt-coins) or use it for purchases. Coinbase allows you to both send and receive bitcoin with its cloud wallet.
Investing via eToro
eToro is a popular social trading platform. They’ve offered cryptocurrency trading for the past two years. eToro is probably best for beginners as it has an easy to use interface and you can trade bitcoin alongside more traditional instruments.
Cloud mining is where you buy mining power through the cloud and earn the bitcoin that mining activity generates. Hashflare, one of the most popular cloud mining services accepts credit cards. When you’ve successfully mined bitcoin on Hashflare, you can transfer it instantly into a bitcoin wallet of your choice.
So there you have three different ways to buy bitcoin using a credit card. Have any suggestions or alternatives – let me know in the comments.