So you’d like to buy some bitcoin with a debit card.
The first thing to know about buying bitcoins with plastic is that many credit card companies won't allow this transaction. U.S.-based banking giants such as Wells Fargo, Chase, Capital One, Bank of America have all put a halt to the purchase of cryptocurrency with a credit card. (If your purchase was rejected with a credit card, that's probably why.)
Some of the banks that have not yet stopped the practice have made it less attractive by treating crypto transactions like cash advances. This is not, as some outlets have suggested, because legacy payment systems are “scared” of cryptocurrencies.
It’s because when you use a credit card, you’re using the bank's money for what is considered a highly speculative investment. Banks and lenders generally don’t like that when investment products are concerned. This is nothing new since credit card companies have long-standing policies of restricting the use of credit for the purchase of investment products.
The key thing to remember when discussing bitcoin is that at the moment it is chiefly a financial asset, and one that has yet to find its stable value. The price of a bitcoin can fluctuate by thousands of dollars within a few months, leaving investors in a position of high risk and high reward. Great news during an upswing, this volatility can also lead to equally huge losses depending on when you purchase.
That’s no problem if you buy with cash or if you intend to use a bitcoin as currency. Investors who buy their assets with debt, though, often plan on paying that bill with their profits. Banks want to avoid that because if that investor’s bitcoins drop, he might not be able to pay his bill at the end of the month. Particularly given America’s very specific history with debt-fueled investment, credit card companies want to make sure they’re not the ones holding the bag if a would-be crypto millionaire takes big losses.
That said, there are still some banks that allow their clients to use credit cards to purchase bitcoin and altcoins. If you have a bank that does that, kudos for being one of the few who gets to do business with a forward-thinking bank that allows you make your own informed buying decisions. Purchasing bitcoin and altcoins on the Xcoins platform will be a piece of cake.
However, if you do not fall into that category, you still have options.
(Photo credits: Antana)
There’s always your debit card. Often they run on the same Visa and MasterCard rails as your credit card, so why can you use this piece of plastic instead of the other?
It's because, with your debit card, you only stand to lose your own money.
When you make a purchase on your debit card, it deducts the amount directly from your bank account-- without bills, without interest, without any chance to declare bankruptcy and leave someone else paying for your losses. You can buy all the bitcoin you can afford and pocket the profits if the price goes up.
No muss. No fuss. No debt.
It does, doesn’t it? Who doesn’t love those two little words “no debt?”
Now, it's true that using debit instead of debt does limit the number of coins you can buy. A debit card transaction limits your purchase to cash on hand. That’s the whole point. Those who want to make an investment with debt, such as a credit card or bank loan, often do so because they’d like to make a bigger investment than they can afford. It’s called leveraged investing, or “buying on the margin," and by definition, it almost always means the investors won’t have assets to cover their losses if things go bad.
That’s good for nobody.
Just remember the golden rule. Credit cards are for when you want time, not for when you need money. JUST REMEMBER: Many banks consider the purchase of cryptocurrencies with a credit card to be a ‘cash advance’ transaction and may apply exhorbitant fees to the barge from their end - this is not only a flat fee that many banks charge, but a higher-than-normal interest rate on these purchases. All banks are different and some done do this, but be aware! And if you are unsure, please contact your bank directly or use a debit card.
So if you’ll collect killer points and have the cash to pay off your bill, by all means, reach for that credit card. Otherwise, why not buy bitcoin with the money you have?
Go get your wallet, because this will be easy:
(Photo credits: Antana)
Step One: Start your crypto future by going to XCoins. If you don’t have an account yet, click Sign Up For Free. If you have an account, click Buy Bitcoin.
Step Two: If you need to create an account, you can do so by linking your Facebook or Google profiles to our site. Otherwise, create an account by providing your name, e-mail address, and a clear copy of a valid ID.
Step Three: Discover one of the ways that XCoins is different. (The first of many!) Watch as our system takes minutes, even seconds, to automatically review your ID and confirm your new account. You came here to buy your bitcoins today, not tomorrow.
Step Four: Create an order and select “Visa, MasterCard” as your method of payment.
Step Five: Enter your bitcoin wallet address so we know where to send your purchase.
Step Six: Click “complete payment.” You’ll be sent to a page where you can enter your payment information, the same way you would while buying a Chia Pet on Amazon but with much cooler results.
That’s it! Now just sit back and relax while we deliver your brand new bitcoin.
Now that you know how, what are you waiting for? Sign up for free and buy your bitcoin today!
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