Crypto Taxes and Accounting

Guide to Buying Crypto with Credit Card: How to Buy Crypto with a Credit Card and Earn Rewards

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August 12, 2022
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    The crypto craze has been going on for quite some time now and it wouldn’t be a surprise if you too, at some point, thought of whipping out your credit card and joining the crypto world like most of us. But there's a catch; you might be surprised to know that buying cryptocurrency with a credit card is a no-go, according to crypto experts.

    There are a lot of reasons and parameters to take into consideration when buying crypto with a card. In this article, we'll see if you can buy crypto with a credit card, if not then what are the reasons, and if yes, then what is the best site to buy cryptocurrency with a credit card?

    Can You Buy Crypto with a Credit Card?

    Buying cryptocurrency with a credit card is a tedious process. First, you have to find an exchange that facilitates buying and selling of cryptocurrency, similar to a stock exchange. Bitcoin, Ethereum, and Dogecoin are bought and sold using crypto exchanges. Each crypto exchange has its own set rules, fees, payment times, and selection of coins.

    Exchanges, such as Coinbase, Gemini, and Binance.US, don't allow credit card purchases, whereas others may accept but only from people living in a certain country or state. For the companies that will accept credit cards, you might have to pay 3% or more for your transaction.

    That's not the end of trouble...there's more. Even if you are ready to pay the exchange's fees to use your card to buy crypto, there might still be some issuer with your credit card company. The purchase of cryptocurrency has been forbidden by most of the major card companies. But why so?

    Why Won't Many Credit Card Issuers Let You Buy Crypto with a Credit Card?

    Let's have a look at the reasons why credit card issuers don't allow crypto purchases.

    Poorly Regulated

    It is well known that bitcoin is subject to far less regulation than the majority of financial assets. This lack of regulation increases volatility and raises the danger.

    Volatility

    The cryptocurrency market is infamously unstable. If you've looked into cryptocurrency patterns, you must be aware of the dramatic highs and lows that Bitcoin has gone through in recent years. Even though their backgrounds are less well known, other cryptocurrencies have seen comparable tendencies. The issuer won't permit you to use their credit line due to this instability.

    Cash Equivalence

    Fiat money can be exchanged for cryptocurrencies. Because it may lead to instances of tax evasion, financial fraud, and other illicit actions, credit card issuers are not very fond of this.

    However, not every credit card company is the same. There are several credit card companies that let you use their cards to buy cryptocurrency. So, if you manage to obtain one that permits cryptocurrency purchases, this is how you should go.

    How Can You Buy Crypto with a Credit Card?

    The process of purchasing cryptocurrency with a credit card is comparable to making any other online purchase:

    1. Finding a credit card issuer that will permit the purchase of crypto
    2. Finding a cryptocurrency exchange that entitles you to purchase crypto using a credit card
    3. Buying crypto

    As discussed, the most difficult bit will be to find a credit card issuer and a cryptocurrency exchange that acknowledges such transactions.

    Buy Crypto with a Credit Card: Pros & Cons

    There are so many disadvantages of buying crypto with a credit card, that it washes out the potential advantages.

    Earning points while buying Bitcoin with a credit card is a benefit. However, the majority of card issuers that permit cryptocurrency purchases classify them as cash advances. This way you won't be eligible for credit card benefits or a welcome bonus.

    It also implies that you won't get the security that you normally get from credit card purchases. So when your currency loses value, you'll be unable to file a request for a refund of your purchase.

    And lastly, the fees. A crypto exchange will charge approximately 3% to use your card in addition to what they charge for trading. And that's not it; another 3% might be charged by the issuer for the cash advance fee, and whatever interest adds up before your transaction is paid off. So you're paying an additional 6% just because you're using a credit card.

    Advantages

    • Using a debit or credit card is one of the simplest and fastest ways to buy Bitcoin
    • A chance to win rewards
    • A good option for not-so-tech-savvy users as most people are familiar with shopping online and the process here is the same 

    Disadvantages

    • Inability to earn rewards
    • Doesn't count toward credit card sign-up bonuses
    • Credit card protections won't apply
    • High fees

    How To Choose The Best Credit Cards that Allow Crypto Purchases?

    When looking for a credit card for your crypto needs, you'd obviously look for the best crypto credit card. There are a few key attributes to look for in a credit card:

    • User friendly: The interface should be user-friendly and hassle-free so that it is easy to start purchasing Bitcoin and other crypto-assets.
    • Secured: Choose a crypto credit card that allows you to store your coins securely.
    • Fees: A crypto exchange will charge about 3% to use your card on top of what they charge for the trade in the first place. And that's not it; your card issuer will charge another 3% for the cash advance fee, and whatever interest adds up before you pay off your transaction.
    • Add-On Features: When you're looking for different cards, think about your personal circumstances and conditions to see which card is best suited for your specific needs.
    • Rewards & Incentives: The rewards offered by crypto credit cards at the moment are limited. Some offer cashback rewards, while some don't even offer welcome bonuses.
    • Mobile App: Ability to handle everything on the go.
    • Reliability: Make sure that you’re working with a renowned brand when choosing a crypto credit card, as you wouldn’t want to find yourself in a position where you cannot access your own funds.
    • Availability: At present, it might be challenging to find a card that is accessible globally, so check to see whether your chosen Bitcoin card is truly accepted in your location before you invest.

    Now that you know how to choose the best credit card that allows crypto purchases, you must be wondering: what credit cards allow crypto purchases?

    Buy Crypto with the 10 Best Credit Card

    If you're looking for the best site to buy cryptocurrency with a credit card, we've simplified the process for you. Here's a list of the best crypto credit cards:

    1. Bitpay Mastercard
    2. BlockFi Visa Card
    3. Coinbase Visa
    4. CRO Visa
    5. Gemini Credit Card
    6. Swipe Visa
    7. Upgrade Bitcoin Rewards Visa
    8. Venmo Credit Card
    9. Wirex Visa

    Bitpay Mastercard

    • Card type: Mastercard
    • User friendly: Simple user interface
    • Cost: About $10
    • Availability: United States
    • Supported Cryptocurrency: BTC
    • Feature: No investment in a proprietary token is required
    • Reward: NA


    BlockFi Visa Card

    • User friendly: Simple, reliable, and legitimate credit card
    • USP: Supported by BlockFi, which is one of the most dependable crypto lending services.
    • Feature: On surpassing the set spending amounts, new users can earn free Bitcoin
    • Cryptocurrency Supported: Bitcoin
    • Rewards:  Cashback rewards of 1.5% paid in BTC to your BlockFi interest account


    Coinbase Visa

    • Card Type: Visa
    • USP: Supported by one of the most trustworthy companies in the crypto industry
    • Feature: Link it to your Coinbase account; crypto can be spent anywhere Visa is accepted
    • Cryptocurrency Supported: 9
    • Rewards: None


    CRO Visa

    • USP: Unique model offers five different tiers of cards
    • Cryptocurrency Supported: 7
    • Rewards: About 8% crypto cashback; available benefits including free Spotify, Netflix, and Airport Lounge access


    Gemini Credit Card

    • Card Type: Mastercard
    • Annual Percentage Rate: Varies between 13.24 and 24.24%
    • Crypto Rewards: Bitcoin, Ether, and 60+ cryptocurrencies
    • USP: Move rewards to your crypto wallet
    • Rewards: Various rewards for dining, groceries, and other purchases
    • Annual fee: None

    Swipe Visa

    • User friendly: Dual-interface NFC/EMV card
    • Cryptocurrency Supported: 7
    • Features: Stable integration with Apple Pay, Google Pay, and Samsung Pay; four different tiers of cards with different corresponding rewards
    • Rewards: 1-5% Crypto cashback; significant benefits for anyone willing to stake SXP tokens


    Upgrade Bitcoin Rewards Visa

    • Card Type: Visa
    • Annual Percentage Rate: Ranges between 8.99% and 29.99%
    • Crypto rewards: 1.5% back in BTC on payments

    Venmo Credit Card

    • Card Type: Visa
    • Annual Percentage Rate: Ranges between 15.24% and 24.24%
    • Rewards: Earn 3%, 2%, and 1% on top spending category, second-top spend category, and on other transactions respectively
    • Crypto Rewards: Option to choose rewards in BTC, ETH, LTC or BCH
    • USP: No transaction fee for crypto conversion
    • Annual Fee: None

    Wirex Visa

    • Card Type: Visa
    • Cryptocurrency Supported: 6+
    • REWARDS: Stake WXT tokens and get up to 0.5% - 1.5% cashback; on staking enough WXT tokens you can get discounts on fees

    The Bottom Line

    In conclusion, if you want to buy cryptocurrency with a credit card it comes down to if you can versus if you should. Can you buy crypto with your card? If you find a card issuer that allows you to buy crypto and find an exchange that accepts credit cards, you definitely can. But should you buy crypto with your card? It's not a good idea since there are more drawbacks to purchasing cryptocurrencies using a credit card than benefits.

    If you still want to carry out the process, it is recommended to carefully understand the terms of your card issuer and look for the best site to buy cryptocurrency with a credit card.

    ZenLedger easily calculates your crypto taxes and also finds opportunities for you to save money and trade smarter. Get started for free now or learn more about our tax professional prepared plans!

    Best Crypto Credit Card FAQs

    1. What happens if you buy cryptocurrency with a credit card?

    Buying cryptocurrency with a credit card is a tedious process. Exchanges, such as Coinbase, Gemini, and Binance.US, don't allow credit card purchases, whereas others may accept but only from people living in a certain country or state. The companies that will accept credit cards can add 3% or more to your transaction.

    2. Can I buy Crypto on a credit card?

    First, you have to find an exchange that facilitates buying and selling of cryptocurrency, similar to a stock exchange. Bitcoin, Ethereum, and Dogecoin are bought and sold using crypto exchanges.

    3. What risks are involved when buying bitcoins with a credit card?

    Make sure that the company you're buying for is regulated and has a good reputation, as this can minimize the risk factors. Cash advances have been reported by some users as risky, so it's important to understand how your credit card issuer handles Bitcoin purchases.

    4. Are crypto credit cards safe?

    Yes, crypto credit cards are safe for making a transaction but we have to keep in mind that cryptocurrencies are highly risky and volatile. So, the value of your rewards may fluctuate over time. Moreover, a lot of crypto tokens as well as exchanges might have legal and regulation issues, so there’s an inherent risk there, but legislation is still evolving and in time we will get robust regulations.

    5. Are there any crypto debit cards on the market?

    Yes, crypto debit cards are available in the market. There’s Binance Visa card, Robinhood Cash Card, and more. These cards allow you to spend your crypto and even earn rewards in crypto. Shortly, new products are likely to hit the market as Visa has partnered with many platforms.

    ZenLedger easily calculates your crypto taxes and also finds opportunities for you to save money and trade smarter. Get started for free now or learn more about our tax professional prepared plans!

    Get Started Now

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