Bitcoin is known for being a volatile currency. Despite the risks, a study on Statista states that there are already over 63 million Bitcoin wallet users as of December 2020. From a support level of only $10,500, a previous article on Bitcoin forecasts that the cryptocurrency will continue to rise to around $13,000 as long as it stabilizes. Bitcoin as a long-term investment also appeals to many, not to mention that buying it can be quite simple. All you need to start is a Bitcoin wallet to store the cryptocurrency.
Can You Use a Credit Card?
Normally, you buy Bitcoin through debit cards and crypto wallets. But you can also use credit cards to purchase cryptocurrency, which may prove to be a better alternative. However, using a credit card is not as simple as just providing your information on the website. You first must choose an exchange platform where your money gets exchanged for Bitcoin. Market Watch explained the steps to buying Bitcoin with your credit card, and it’s essentially the same process as making a purchase through a PayPal account or bank transfer. The only difference is that you’ll have to input your card details after creating your virtual wallet. Once you’ve used your card to buy the cryptocurrency, you just need to wait for the Bitcoin to be sent to the wallet.
Why Should You Use a Credit Card?
Buying Bitcoin with a credit card is straightforward. One advantage is that you can purchase Bitcoin even if you don’t have the funds on hand. You also don’t need to go through third-party sites the way you normally would when buying through a bank transfer either. One of the biggest advantages is that it can improve your credit score, and a good score can give you significant savings on big loans. One of Petal Card’s top factors that affect your credit score is credit utilization. The more that you use your credit card, the higher your score will be. Since you will likely be making a sizable investment with Bitcoin to make it worth it, this will have a considerable impact on your credit score.
Can All Credit Cards be Used?
More and more credit card providers are allowing the purchase of Bitcoin, such as American Express. Recently, Visa partnered with BlockFi to launch the first ever credit card with Bitcoin rewards. This card can also be used for withdrawing, earning interest, trading, or using it as collateral toward a crypto-backed loan. If you’re unsure if your card can buy Bitcoin, it’s best to ask your provider.
Concerning where you can use credit cards, one of the easiest ways would be through CEX.IO. Once you’re on the website, the steps are simple to follow. The site offers instant withdrawals of funds as long as your card is linked to your profile on the site.
As we mentioned, using a credit card lets you buy Bitcoin without having the cash on hand. However, as with all credit cards, the downside of this is you can overspend and find yourself in debt. And with the value of Bitcoin fluctuating much more than fiat currency, the losses could end up being much bigger than a regular Forex investment. Another concern is fraud. A common way to get people to pass on their credit card details unwittingly is through offering Bitcoin buying services. Only use trustworthy exchanges and do your research.
Buying Bitcoin using a credit card is a convenient and quick way to invest in the cryptocurrency. As it becomes more popular, expect more people to link their credit cards directly to a Bitcoin wallet. As long as investors apply the same rules as any other investment, using a credit card to purchase Bitcoin is a viable option.