Can You Buy Crypto With a Credit Card?

How you initially buy or invest in cryptocurency (aka crypto) is a hot topic. Buying crypto with a credit card, or rather, how to buy crypto with a credit card, is a particularly common question among those who are new to trading cryptocurrency.

You can buy crypto with a credit card; however, some who are more experienced in crypto would advise against it. This is not to say that it is an entirely bad decision, but rather that it may simply not be the most prudent decision for everyone.

There are both pros and cons to buying cryptocurrency with a credit card, and traders and investors need to do their research and consider all the factors before they make a decision.

Advantages of Buying Crypto with a Credit Card

There may be some benefits to crypto purchases with a credit card, especially if you are new to trading and investing in crypto. Though many exchanges do not accept credit cards, many others do, and this can be a quick and easy payment method for new buyers who want a simple transaction option.

Because credit cards are so commonplace and easy to use, the platforms and exchanges that do allow them generally offer interfaces that are quite user-friendly. While using a credit card to buy crypto may not always be the best option for more experienced investors, it does offer some advantages to new traders who are not yet experienced with more complex traditional investment methods.

Doesn’t Require Cash on Hand

One major perk of using a credit card is that it doesn’t require you to have cash immediately available. This can be helpful if you want to buy bitcoin or another coin before its price spikes.

Crypto transactions happen fast, and being able to act instantly can make a difference in gains. You can enter the amount, confirm your card details, and make the purchase in seconds—making this a powerful tool when time is of the essence. Credit cards give people more opportunities to invest without having to wait until they have money saved up, which can lead to higher returns if the coins increase in value after the purchase.

Quick and Familiar Payment Method

Many people are already familiar with how to use credit or debit cards online. This makes buying crypto more accessible for those who aren’t comfortable with wire transfers or bank transfers.

Platforms like Binance or eToro simplify the process—you just choose the currency, enter the amount in USD or other fiat currencies, input your card details, and confirm the transaction. This convenience is one reason Apple Pay and other digital wallets are becoming more accepted in crypto platforms.

Drawbacks of Buying Crypto With a Credit Card

While buying crypto with a credit card may yield high returns and make the transaction process quick and easy, there are several risks and disadvantages to using this method. It’s up to you to decide what works best for your situation, but it’s always wise to consider both the pros and the cons.

Debt Risk

When using a credit card to make any kind of purchase, there is always the risk of racking up debt if you are not careful with your spending habits. With cryptocurrency, however, there is even more of a risk because of the potential for the coins purchased to drop in value.

Investors can easily accrue large amounts of debt if they buy crypto in bulk on their credit card only to have the coins they bought drop in value. Credit cards make it easier to spend whenever you’d like, whereas when people buy crypto with money on hand, they tend to be more thoughtful about their buying decisions.

High Interest Rates

What many cardholders are often unaware of is that credit card issuers will often treat cryptocurrency purchases like cash advances. Unfortunately, this often results in higher fees with no grace period for interest charges. A standard cash advance fee can range anywhere from 2% to 5% of the transaction amount, and overall interest rates for advances are high as well, standing at up to 36%.

High Transaction Fees Add Up

One of the biggest drawbacks of using a credit card to buy crypto is the transaction fee. Most credit card companies treat crypto as a cash advance, leading to fees of 3–5% and interest rates up to 36%, with no grace period.

On top of that, many crypto exchanges charge additional fees for card transactions. If you’re not careful, these costs can quickly eat into your potential gains on purchased cryptocurrency.

Restrictions

Though many exchanges allow purchases with credit cards, there are many more that don’t. Furthermore, not all credit card companies allow people to use their cards for crypto purchases. So overall, choosing to buy crypto with a credit card will significantly limit an investor’s range of options.

How To Buy Crypto with a Credit Card

If traders and investors are going to use a credit card to buy crypto, they will need to be smart to avoid racking up debt and fees. There are several important steps investors can follow to safely buy crypto with a credit card and help maximize profit and minimize risk.

Any kind of trading comes with risks, even in traditional trading markets. So the thing to remember is that before you invest, you should always do enough research.

Find a Credit Card-Friendly Exchange

Again, not all cryptocurrency exchanges allow credit cards, so if you plan to buy with credit, you will need to first do some research to find the ones that do accept these kinds of transactions. And even when you do find exchanges that accept credit cards, make sure you pay attention to things like fees and whether your credit card issuer will charge higher interest rates. Some of the exchanges that currently accept credit cards include Coinmama, CEX.IO, Bitpanda, eToro, and Binance.

Before committing, compare fees, check reviews, and ensure the platform supports your preferred payment method.

Research Your Card Issuer’s Crypto Policy

In addition to doing some research to find the right exchanges that allow credit card use, investors should also check with their card issuer’s cryptocurrency policy. Of course, if your creditor doesn’t allow crypto purchases at all, then you won’t even be able to complete a transaction. Others do allow it, but they might not be upfront about whether it will be treated as a credit purchase or a cash advance.

Cash advances, again, do tend to rack up higher fees and result in higher interest rates. If this is how your card issuer treats crypto purchases, you may want to think about using another method or opening a credit card with a company that has fewer fees and treats the transaction as a regular credit purchase.

Set Up Your Transaction

Once you’ve done your research, know of some good exchanges, and have a credit card that won’t result in too many fees, it’s time to start buying coins. The first thing you’ll need to do when you go to an exchange to make a purchase is enter your credit card information and save it as a preferred method. This is important because you don’t want to have to re-enter your information every time you want to buy coins. Remember, cryptocurrency is volatile, and the value can change fast, so you want to be able to make a purchase as quickly as possible.

Next, you’ll need to decide which cryptocurrency you want to buy, what currency you are using (USD, EUR, CAD), and the amount you wish to purchase. This might seem easy, and most of it is, but you should also do some research before deciding which cryptocurrency you want to buy. Trading crypto, like traditional trading, requires a strategy and paying attention to things like market trends and price fluctuations to ensure you make a return on your investment.

Pay Your Balance Promptly

After you’ve done all of the above and made your purchase, be mindful of your spending habits and pay off your credit card balance as soon as possible. It’s all too easy to buy crypto without much thought with a credit card, as it’s much easier than waiting until you have money on hand. But the higher your credit card balance, the harder it is to pay off your debts, which can lead to a bad credit score and higher interest rates.

This, coupled with all the potential fees from cash advances and crypto exchanges, can quickly lead to a bad financial situation. So it’s always best to pay off your balances as soon as you can and to be mindful of the purchases you are making in the first place.

Best Ways To Buy or Invest in Cryptocurrencies

If you are looking to invest in cryptocurrency, there are a few things you’ll need to consider before jumping in. The best ways to buy or invest in cryptocurrency include:

• Buying directly from a reputable exchange;
• Using a brokerage;
• Using a peer-to-peer exchange to buy and sell crypto;
• Using a crypto trading platform;
• Invest in a cryptocurrency mining operation or stocks;
• Buy from a Bitcoin ATM;

Many exchanges and trading platforms can be easily downloaded as an app on your phone. For a more long-term investment, such as a Crypto IRA, you may need to consult a brokerage. Taxes may not be avoidable when trading and investing in crypto, so you’ll want to monitor your transactions closely.