Can You Buy Crypto With A Credit Card? (2024)

Like gold in the 1850s and dot-com stocks in the 1990s, it seems everyone wants in on crypto. Purchasing cryptocurrency with a credit card is possible but can be a dangerous financial undertaking. Cardholders can expect fees from both sides of a transaction involving cryptocurrencies and credit cards, plus face the risk of losing money quickly because of volatile currency values and high interest rates.

Can You Buy Crypto With a Credit Card?

In short, it depends. Here’s what you need to know about buying cryptocurrency with a credit card.

Who lets you buy cryptocurrency with a credit card?

As of April 2022, here are policies for several major issuers on crypto purchases:

• American Express: Allows purchases on some exchanges with a few strict terms
• Bank of America: Does not permit crypto purchases with any of its credit cards
• Barclays: Does not permit crypto purchases with any of its credit cards
• Chase: Does not permit crypto purchases with any of its credit cards
• Discover: Does not permit crypto purchases with any of its credit cards
• Wells Fargo: Does not permit crypto purchases with any of its credit cards

Citibank, U.S. Bank and Credit One had no comment to a Forbes Advisor inquiry about their policies regarding crypto purchases. If your issuer isn’t listed here, contact the number on the back of your card and ask a representative.

Check with your specific credit card issuer to find out if it allows cardholders to purchase any type of cryptocurrency.

In addition to checking with your credit card company, you should also look for a cryptocurrency exchange willing to accept credit cards for deposits or purchases. Some only allow direct deposits from banks, cash deposits or debit card purchases. Coinmama, CEX.io and Paxful are all exchanges currently accepting credit cards.

Limitations also exist as to what types of credit cards may be accepted by exchanges. Some exchanges may only take Visa or Mastercard credit cards. Paxful, for example, has a variety of vendors from around the world who sell on the exchange website. It’s one of the few exchanges currently accepting American Express credit cards, but acceptance on the exchange also greatly depends on the selected vendor.

When Purchasing Cryptocurrency With a Credit Card Is Not Allowed

Several major U.S. credit card companies will not allow cardholders to purchase cryptocurrency with a credit card. Reports show that Citibank, for example, blocked cardholders from using credit cards to purchase Bitcoin and other cryptocurrencies in 2018, perhaps fearing its volatility and the potential for fraud. Some credit card companies may even issue cash advance fees if a cardholder attempts to make a crypto purchase.

But you should also be aware that even if you do have a credit card that allows crypto purchase, some cryptocurrency exchanges will not accept credit cards as payment, such as eToro and Coinbase. And, of the exchanges that may allow you to make a purchase with a credit card, the purchase won’t be instant as the exchange will likely take a day or two to ensure that the transaction is valid and not being used fraudulently. In the volatile world of crypto, this kind of delay may not be ideal.

Can you buy crypto with a credit card without verification?

Whether or not you can buy cryptocurrency with a credit card without verification will depend on the platform you use. If you are required to provide proof of identity, it will usually take the form of submitting a copy of a government ID (such as a driver’s license or a passport). This measure helps platforms prevent fraud and in some cases meet federal regulatory requirements.

How to Buy Crypto With a Credit Card

Not all platforms will allow you to use a credit card to make your cryptocurrency purchases. If you do choose a platform allowing such transactions, keep in mind that there may be extra fees associated with the purchase. Many credit card companies process cryptocurrency purchases via credit card as cash advances, which can incur high interest rates, among other fees.

Remember: A cash advance does not usually involve a grace period and will begin incurring interest immediately.

Types of Fees Cardholders Can Expect

Cardholders can expect to pay fees to both the exchange the currency is purchased with and fees to the credit card issuer. Before making any purchases with a credit card, research the exact cost for each purchase and what the monetary benefit will be (or will not be) before incurring the charge.

Cryptocurrency Exchange Fees

The exchange may charge a commission fee and/or a service fee for using a credit card to purchase or deposit crypto. For example, CEX.io is an exchange offering a handful of cryptocurrencies for purchase, including Bitcoin. Users are allowed to purchase crypto using a Visa or Mastercard credit card, but U.S. cardholders are subject to a 2.99% commission fee with a minimum purchase of $20.

Depending on the exchange, vendors within the exchange may also design fees for purchasers depending on a few factors, like where the vendor is located, the purchase amount and what type of credit card is used.

Credit Card Company Fees

Some credit card companies allowing cardholders to make crypto purchases treat the purchases as a cash advance (cash advances usually involve a cardholder using a credit card to withdraw money from an ATM). This has several critical disadvantages.

There are several types of fees a cardholder can incur:

• Cash advance fees: Some cards treat a cryptocurrency purchase as a cash advance. This means each crypto purchase is subject to a cash advance fee. A typical fee of either $10 or 5% (whichever is greater) would be charged. These fees are in addition to fees charged by the vendor or exchange.
• Cash advance interest rates: Most cards have a higher Annual Percentage Rate (APR) for cash advances—often over 25%. This is a variable interest that changes with the market. Interest will start to accrue on the day the purchase is made and will continue to accrue until the credit is paid off. By comparison, cardholders have up to 25 days to pay off a regular credit card charge before accruing any interest.
• No credit toward rewards or bonuses: Credit used to purchase crypto (and thus make a cash advance) typically doesn’t qualify for any purchase rewards nor toward spending that would normally apply to a welcome bonus.
• Lower credit limits: Cash advances often have a lower credit limit than the cardholder’s overall credit limit that applies to the card itself. Cardholders hoping to make big crypto buys may find themselves limited by the cash advance terms and limitations.

Other credit card risks may include:

• Foreign transaction fees: A foreign transaction fee may be applied to each crypto purchase if the vendor is from a different country and the credit card used charges fees for foreign transactions.
• High risk for fraud: There’s outsized fraud potential if a vendor isn’t properly vetted and the cardholder gives away valuable information such as their name and credit card number.
• High investment risk: Investing in crypto using your credit card can lead to serious debt. Cardholders can quickly accrue fees and interest they may later be unable to pay back, significantly increase their credit utilization rate or can lose their investment value due to a volatile crypto market.

Other Ways to Buy Crypto Using Credit Cards

As the cryptocurrency market evolves, so does the standard financial market. A few start-up credit card issuers offer Bitcoin or other cryptocurrencies as bonuses or rewards. For example, the BlockFi Rewards Visa® Signature Card earns 0.25% back in crypto on all eligible trades, 1.5% back in crypto for every purchase and the ability to earn 2% back in crypto after $30,000 of annual spend. The company also boasts more rewards from trading and client referrals. Other cards that earn crypto rewards include the Crypto.com Visa Card*, The Gemini Credit Card®* and the Status Money Credit Card*.

Pros and Cons of Buying Crypto With a Credit Card

Few advantages come with using a credit card to buy cryptocurrency. Among them is convenience. Because cryptocurrency can be a volatile, risky investment, taking on debt to make such an investment is ill-advised. It can also be quite expensive. Platforms accepting credit card payments often tack on additional fees for credit card transactions, and since credit card companies often treat cryptocurrency purchases as cash advances, you can expect to be charged a higher interest rate and see interest accrue immediately.

Bottom Line

Using a credit card to purchase cryptocurrency won’t make sense for most. Cardholders should consider the major disadvantages before deciding to buy crypto using a method involving a credit card. Purchasing crypto is often best accomplished using direct deposits, debit cards or wire transfers.

Credit card purchases of cryptocurrency often come with high fees. This can reduce the value in a good investment or minimize returns by a significant margin. Cardholders also face a high risk of burrowing themselves into deep debt that can be hard to climb out of. For those who insist on using a credit card, we advise contacting a credit card representative to discuss what the repercussions will be with a specific credit card issuer and look for a cryptocurrency exchange with the best credit card rates.

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