Buying crypto with a credit card is easy once you know how to go about it.
Buying bitcoin with a credit card can be a bit trickier and more expensive than local bank transfers, but there’s no shortage of options once you know where to look.
There are bitcoin exchanges and trading services that operate in Australia and beyond, and they all let you buy bitcoin with a credit card.
You can just pick your preferred one below, or read on to learn more about the differences between them, and why buying cryptocurrency with a credit card can sometimes be tricky.
Buying cryptocurrency with your credit card is becoming harder. Several banks in the United States, United Kingdom and other countries have banned their customers from using credit cards to buy cryptocurrency, and CommBank introduced its own ban in February 2018. However, CommBank customers can still use their debit cards to buy digital currency.
The three other banks that make up Australia's "Big Four" – Westpac, ANZ and NAB – haven't introduced similar bans as yet, but it may be worth checking with your financial institution or card issuer to find out whether or not you're allowed to buy cryptocurrency with your credit card.
Where you can buy bitcoin with a credit card
How do I choose a service?
The first step is to consider what type of service you’re looking at. The list above gives you a list of exchanges. Below is an overview of categories to keep in mind.
|What are they?||Which ones accept credit cards?|
|Peer-to-peer exchanges||Buyers and sellers match one-on-one and make transfers in a way that suits both parties. However, not all sellers will accept credit card payments, especially if you have yet to develop a good reputation on that site.|
|Bitcoin brokers||These bitcoin sellers can accept a range of payment options, including credit cards. It can be a quick and simple way of buying bitcoin, but not necessarily the most cost-effective.|
|Open exchanges||Load money into your trading account and browse the listings available. This is potentially one of the most cost-effective options but it can be hard to find a full-service exchange that accepts credit cards. You might also have relatively low transaction and withdrawal limits until you can prove your creditworthiness on the exchange.|
What to look for when buying bitcoin with a credit card
Each service might have its own restrictions around paying by card. These can not only affect how long your transaction will take but also how much it will cost.
In particular, you should note that many card issuers will classify buying bitcoin as a cash advance, which means it will attract higher interest rates than normal purchases and will usually incur a cash advance fee. You’ll want to make sure you can afford to pay off the full cost of your bitcoin purchase.
When comparing your options, look at:
- Cards accepted. Like any other service, not all cards will be accepted everywhere.
- Transfer limits. You might find yourself with low transfer limits initially, rising over time as you make more transactions. The credit card transaction limit might be different from the maximum limit for other payment methods.
- Credit card surcharges. You’ll often be paying a 1-2% credit card surcharge on top of any other fees and commissions being charged. Australian law prohibits excessive credit card surcharges, but you won’t necessarily be buying under Australian law. Some overseas services might charge significantly more. With credit card payments in particular, it might be worth shopping around and checking the fees at different cryptocurrency services.
- Currency exchange fees. Remember to watch out for currency exchange fees. If you’re using an Australian credit card on an overseas exchange, you might be paying credit card currency conversion rates. A 0% foreign fee credit card might be useful for cutting costs.
- How it works. Look for a bitcoin-buying process that suits your needs. For example, do you need to link a card to your online account, or can you just make one-off payments?
Is it easy to buy other cryptocurrencies with a credit card?
Bitcoin is the most widely offered cryptocurrency, so your options for other altcoins will be more limited.
If you want to buy Ethereum, Bitcoin Cash, Bitcoin Gold, Litecoin or any other cryptocurrency with a credit card, you might have the most success on an exchange, or by simply buying bitcoin and then trading it for your altcoin of choice.
Can I buy cryptocurrencies with a debit card?
It can be hard to buy anything online with a debit card, and cryptocurrency is no exception. The easiest way to buy bitcoin with a debit card might be through an intermediary.
For example, you might pay for your money transfer with a debit card at a physical Western Union branch, and then send that transfer to a service that accepts Western Union payments.
Why aren’t credit cards more widely accepted?
There are a few reasons why more providers don’t accept credit cards, with the main issue the problem of chargebacks. While bitcoin transactions are irreversible, credit card charges might be cancelled or reversed.
If buyers asks their card providers to reverse charges after receiving their bitcoin, it’s theoretically possible that they would be able to get their coins while cheating the sellers out of their cash.
Is buying cryptocurrency with a credit card safe?
People have been using their credit cards online for a long time now. In most cases, you can probably expect cryptocurrency services to have better security than some other online merchants you give your card information to.
If you don’t feel comfortable giving a provider your credit card details, you probably shouldn’t feel comfortable buying cryptocurrency from them either.
However, be aware that there may also be privacy issues to take into account. By paying with a credit card, you’re giving up some of the anonymity that other payment options can offer.
How to store your coins
Once you’ve bought your coins you’ll need a place to put them. This is the case regardless of whether you’re buying with a credit card or any other method.
You’ll typically want a wallet address ready to go before you make a purchase. Wallet compatibility depends on the type of cryptocurrency you’re buying, so research your wallet options before purchasing any coins or tokens.