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While it's possible to buy cryptocurrencies with a credit card, many credit card issuers don't let you use their credit cards to do so. And even if you're able to, it's often not a good idea. The issuer may charge you a fee—or several—and you likely won't earn rewards on the transaction. Plus, exchanges where you buy cryptos might charge you more for using a credit card than transferring funds from a bank account.
If you're considering using a card because you don't have the money available, you also may want to reconsider. Credit cards tend to have high interest rates, and the volatility of cryptocurrencies means the coins you buy may quickly drop in value.
How Does Buying Cryptocurrency With a Credit Card Work?
Cryptocurrencies, including Bitcoin, Ethereum and Dogecoin, are typically bought and sold using online exchanges. Each exchange sets its own rules for the cryptocurrencies it offers, the types of payment it accepts and the fees it charges.
Some exchanges, such as Binance.US, Coinbase and Gemini, don't allow credit card purchases. Others may accept cards, but only from people living in certain countries or states. Those that do let you buy cryptocurrencies with a credit card, such as Coinmama, may only accept Mastercard and Visa cards. (Again, whether you can actually make the purchase also depends on your credit card issuer's policies.)
Before you can buy cryptocurrencies, you generally need to create an account on the exchange's website or mobile app. You may also need to verify your identity, which could require you to upload a picture of a government-issued photo ID. Once your account is verified, you may be able to purchase cryptocurrencies with a credit card or other funding source.
Drawbacks of Buying Cryptocurrency With a Credit Card
There are many potential drawbacks to using a credit card to buy a cryptocurrency, and few—if any—benefits. The specifics can vary depending on your card's terms and the exchange, but consider:
- The transaction may be considered a cash advance. If your credit card issuer treats the transaction as a cash advance, you may have to pay a cash advance fee on each transaction and it may immediately accrue daily interest—often at a higher interest rate than purchases. Your card may also have a lower cash advance limit than credit limit.
- Promotional interest rates won't necessarily apply. Even if your card offers a 0% APR promotional rate on purchases, this generally won't apply to cash advances.
- You may pay foreign exchange fees. If the exchange or payment processor isn't based in the U.S., you may also have to pay a foreign transaction fee for each purchase.
- You might not earn rewards. Rewards credit cards also often won't give you rewards for cash-like purchases, including cash advances. The purchases also might not count toward intro bonus requirements.
Additionally, exchanges may charge different fees depending on how you add funds to your account or make a purchase. Often, a bank transfer can be less expensive than using a debit or credit card.
You'll also want to research an exchange before submitting any of your information. Some sites may be scams set up to gather your personal and payment information. While buying cryptocurrencies can be safe, even some well-known exchanges have abruptly shut down without returning customers' funds—what's known as an exit scam.
Can You Earn Crypto Rewards With a Credit Card?
Similar to how you can use a rewards credit card to earn cash back, miles or points, some companies are creating credit cards, debit cards and prepaid cards you can use to earn cryptocurrency rewards.
However, many of these crypto cards are still being developed. For example, you can sign up for the waitlist for the BlockFi Bitcoin Rewards Credit Card, Coinbase Card and Gemini Credit CardTM. But you can't apply for the cards yet.
There are a few options currently available. The Crypto.com exchange has a prepaid card that you can use to earn rewards. However, you need to buy and hold on to its own cryptocurrency, Crypto.org Coins, for at least 180 days before you can qualify. The SoFi Credit Card is a more traditional cash back credit card that's open to new cardholders. You can earn 2% cash back on all eligible purchases and choose to redeem your rewards as crypto in a SoFi active invest account.
Compare Cash Back Cards
Another option if you want to use credit card rewards to buy cryptos is to get a cash back rewards card and transfer your rewards to your bank account. Then, use those funds to buy cryptocurrencies through an exchange. While it's not as direct, many exchanges charge no or low fees for bank transfers, and you won't have to worry about credit card cash advance fees.
You can quickly compare cash back card offers from our partners in the Experian CreditMatchTM marketplace. If you sign in, you can choose cards to create a side-by-side comparison and get matched with specific cards or offers based on your credit profile.
All information about the BlockFi Bitcoin Rewards Credit Card, Coinbase Card, Gemini Credit CardTM, Crypto.com prepaid card, and SoFi Credit Card has been collected by Experian and has not been reviewed or provided by the issuer of the card. Offer details may be outdated.