Some time back, there was nothing like buying bitcoin with a credit card. In fact, it was impossible. Today, you can easily buy cryptocurrencies like BTC with a credit card, thanks to the advance in technology. Buying BTC with a credit card comes with its own share of challenges. We can’t overlook some disadvantages like the high transaction cost incurred. These are some of the things to keep in mind when you choose to buy bitcoin with credit card.
In the same way, there are several advantages associated with purchasing BTC with a credit card. It’s a smart move that, if you are keen, it may earn you more than you expected. Let’s see some of the advantages so you can make the right decision as an investor.
1. Ability to earn rewards
Like with most purchases, buying BTC with your credit card gives a chance to earn rewards. However, you must ensure that the purchase is not classified as a cash advance as this will deny you the opportunity to earn rewards. You can also buy bitcoin with credit card.
2. Financial leverage
Another reason people opt to buy BTC with credit cards is financial leverage. If the BTC purchase is treated like a purchase and not a cash advance, a credit card allows you large credit lines which you can profit from on huge price swings. However, you need to be extremely careful if this is your motivation, as spending much more than your pocket is worth can easily land you in huge credit card debts.
3. Paying in FIAT currencies
The alternative to paying for BTC using a credit card allows investors to pay in FIAT currencies. This is not possible in other exchanges. Therefore, it makes it easy for those buying in secret for the first time and those who want to avoid delays that may occur in bank transfers.
4. An easy process for beginners
A credit card interface on platforms and exchanges makes it user-friendly. Buying cryptocurrencies on advanced exchanges is quite a challenge for beginners who are just starting. Credit card payment is ideal for such young investors as the process is fast and simple. Beginners can start with this and slowly proceed to more advanced exchanges once they gain experience.
5. Greater security
The use of credit cards in paying for BTC is gaining popularity. Bank transfers which have been the mode of payment ever since, take several days, which is inconvenient for users. Besides, it’s quite risky as it is more prone to hacker attacks during delays. Credit cards are fast and take less time hence provide greater security to users.
Should I get another credit card to buy bitcoin?
Sadly, there are currently no credit cards that give additional rewards for purchasing BTC or other cryptocurrencies. In case you want to purchase a substantial amount of BTC, and your credit is excellent, consider getting a new credit card that will earn you a signup offer in addition to other gains from the spend itself. Strategies well as you could come out with huge rewards in value.
However, keep in mind that any cash advance transaction will not earn an introductory bonus. Therefore, in case your credit issuer considers cryptocurrency purchases a cash advance, you will not earn rewards. The previously mentioned credit utilization is another reason to consider when thinking of getting a new credit card. The reason being, getting a new credit card will increase credit availability and spending your credit on BTC won’t have a huge effect on your credit scores. However, you can opt to ask for a credit limit increase and avoid getting a new card.
If you settle on getting a new credit card for your BTC purchases, get one that fits your spending needs and offer other benefits even after you get the introductory bonus. A good example is acquiring one that offers travel rewards, so you earn points on hotel stays or flight travels. It’s worth noting that your current credit card can still pay for your BTC. You don’t necessarily have to get a new one to make a purchase. It’s just that a new one may come with extra advantages, that’s why you can consider getting it. And if you can take advantage and get more, why not?
You can easily buy cryptocurrencies like BTC with a credit card. The advance in technology has made it easy and simple such that you can even buy gift cards with cryptocurrencies. Using a credit card to pay for BTC is a genius move that can yield more but, at the same time, very risky. If you are not careful, you may land into a massive financial debt on your credit. Besides, the use of credit cards to pay for BTC is not all advantageous. There is the other side of disadvantages such as the impact on your creditworthiness, high trading fees, set limits, among others. It’s up to you to weigh both sides and make a decision.