Buying cryptocurrency with a credit card is a convenient way to buy cryptocurrencies with your fiat currency. Besides, it is also an accessible and familiar way for newbies just getting into the crypto world.
In this guide, we’ll take you through a step-by-step process of buying crypto with your credit card. We have also included handy tips to keep your transactions smooth and secure, with a list of recommended places to buy crypto with credit cards.
First of all, buying crypto with a credit card is one of the easiest ways to seamlessly transition from the traditional financial world into the digital space. Most cryptocurrency exchanges accept credit cards and allow you to exchange your fiat currencies for crypto.
The process is usually incredibly easy; you can buy crypto from almost anywhere worldwide if you have internet access and a valid card. If you’ve ever made an online purchase, you’re already equipped with the know-how. Just enter your card details, and voilà, on your way to owning some digital currency.
Besides, credit card transactions are processed quickly, so they are fast. This means you can buy crypto almost instantly, which is handy, especially in a market where prices can change in a blink of an eye.
Finally, many credit cards come with some level of purchase protection in the form of cashback. This can be reassuring and helpful, especially for new buyers in the crypto space in case of scams.
While it is simple enough to buy crypto with a credit card, there are some things you should consider before you buy. It’s not just about the ease and speed; you need to know the potential pitfalls and how to navigate them. We cover the most important things you should keep in mind in this section.
How much will your card provider and exchange on the transactions?
Credit card purchases often come with additional fees. Some crypto exchanges charge higher fees for credit card transactions compared to other payment methods.
Plus, your credit card issuer might treat the purchase as a cash advance, which usually means higher fees and interest rates. Always check the fee structure of both the exchange and your credit card issuer. Also, ensure there are no hidden fees that you will pay during the transaction.
Unlike many other purchases, crypto transactions are generally irreversible. If something goes wrong, getting a refund can be difficult, if not impossible.
Although some credit card companies might offer chargebacks, this isn’t a guarantee in the crypto world. Double-check details before confirming any transactions to avoid transaction errors.
What does the law say about buying crypto in your country/state? The regulatory environment for cryptocurrencies is still evolving, and some jurisdictions are still against buying crypto with fiat currency. Therefore, be aware of the laws and regulations in your country regarding crypto purchases and how they might affect you.
How secure is the crypto exchange?
While credit card transactions are generally secure, the crypto space has its share of security risks, including exchange hacks and fraud. When you want to buy crypto with a credit card, ensure you’re using a reputable exchange and take steps to secure your investment.
What is the interest rate from your card provider?
Keep in mind that credit card interest rates are variable and aren’t exactly low. Credit card companies may treat it as a cash advance, which can come with higher interest rates and fees plus a no interest-free period. This can add an extra cost to your crypto purchase, especially if you’re holding onto that balance for a while.
Generally, you must use a CeFi (Centralized exchange) to buy crypto with your credit card. The process is usually simple and straightforward, depending on the exchange you opt for. But for regulated exchanges like INX, you have to complete a KYC verification.
We have broken down the process of buying crypto with credit cards on INX and most regulated exchanges in this section.
Start by selecting a reputable cryptocurrency exchange or platform that accepts credit card payments. There are several options to choose from, so consider factors like security, fees, user interface, and the range of available cryptocurrencies when making your choice. INX is a popular example of a crypto exchange you can use.
Sign up for an account on your chosen platform. This will typically involve providing your email address and creating a password. You will need to complete the verification process required by the platform.
This often includes identity verification to comply with Know Your Customer (KYC) regulations. You may need to submit a government-issued ID, a selfie, and sometimes proof of address for this.
Navigate to the payment methods section on the platform; choose to add a new payment method, and then select ‘Credit Card’.
Enter your credit card details, including the card number, expiration date, and CVV code. Some platforms may also require billing address verification.
If you’re depositing funds, enter the amount you wish to deposit and confirm the transaction. Then, navigate to the buy section, select the cryptocurrency you want to purchase, enter the amount, and choose your credit card as the payment method.
Lastly, Be aware of any deposit limits and fees. For INX, you have to deposit funds (USD) before you can make a purchase and the daily limit is based on a tier system, with the highest at $20,000
Review the transaction details, including fees and the total cost. Cryptocurrency prices can be volatile, so ensure you’re comfortable with the price and fees before proceeding.
After you have confirmed the purchase, the cryptocurrency/fund will be added to your account on the platform. This process is usually instant but can sometimes take a few minutes. For platforms like INX, you then proceed to buy crypto with deposited funds.
Remember, buying cryptocurrency with a credit card can have additional fees and risks compared to other payment methods. Always check with your credit card provider to understand the terms and potential additional costs.
For additional security, consider transferring your cryptocurrency to a private cold wallet, especially if you’ve purchased a significant amount. Hardware wallets are often recommended for their security features.
When it comes to purchasing cryptocurrency with a credit card, you can choose from several platforms. But you want to be sure you’re choosing the right and secure exchange. INX is the first fully regulated trading platform for digital securities and cryptocurrencies. It places a high focus on regulatory compliance, offering a secure environment for trading.
When you can buy cryptocurrency on INX with credit cards, you get a daily limit of up to $20,000 if you have a VIP account, $10,000 with a Pro account, and $1000 with a basic account. INX is well-regulated by the SEC and FINRA.
It is important to note that this service is only available to USD cards at the moment, and withdrawals to the cards are not allowed.
To get started, you need an account with INX. Since INX is well-regulated by the SEC and FINRA, you must follow a KYC process to verify your account. Once you have a verified account, navigate to the “My Portfolio Tab” and follow the steps below:
It is easy to fall for crypto scams, especially when buying crypto with your credit cards. Therefore, you need to stay vigilant to avoid these scams. Here are essential tips to help you safeguard your transactions and personal information.
Yes, many cryptocurrency exchanges and platforms allow you to purchase cryptocurrencies using a credit card. However, it’s important to check if your specific credit card provider and the exchange platform support this option.
It is safe to buy crypto with a credit card when you use reputable exchanges like INX to buy your crypto. You must also take necessary security measures like enabling two-factor authentication and using secure internet connections.
This depends on your credit card company’s policies. Some companies may allow it, while others might restrict such transactions. Check with your credit card issuer for their specific policies.
Yes, most exchanges and credit card companies limit the cryptocurrency you can buy using a credit card. These limits can vary, so it’s important to check with your credit card issuer and the exchange.
Yes, after buying cryptocurrency with a credit card, you can transfer it to your private wallet. However, some exchanges may have a holding period before you can transfer out your newly purchased crypto.
The INX Digital Company inc. is an expert in the field of finance, crypto and digital securities.