Bitcoin enthusiasts are constantly looking to add to their holdings and having the ability to do so through a credit card would be a great asset. However, buy Bitcoin with debit card or through a credit card is not an easy prospect.
Why Most Credit Card Companies Don’t Support Bitcoin
Purchasing Bitcoin requires finding a cryptocurrency exchange that allows credit card transactions. Many top crypto exchanges don’t offer credit card purchases, while those that do charge a sizable fee. These fees can render Bitcoin purchases unsustainable as a 3% or more surcharge will make the transaction too costly.
The consumer will then have to consider if the convenience of using a credit card for buying Bitcoin is worth the fee. However, even if the buyer is willing to pay the fee, the credit card company may place restrictions and many card providers prohibit crypto purchases entirely.
There are three main reasons for this:
Lack of Adequate Regulation
Credit cards rely on strict regulations for maintaining a profitable service. However, the regulatory framework around cryptocurrency doesn’t provide credit card companies the security they need. Instead, a lack of regulation translates to a higher risk for dealing with Bitcoin and other cryptocurrencies.
Potential Legal Issues
The lack of regulation brings an additional risk that has to do with potential litigation. With Bitcoin having the ability to be traded for fiat currency, the prospect of money laundering schemes places credit card companies at risk. For example, government agencies and other actors may investigate tax evasion, criminal money laundering, and other legal issues.
With credit card companies being intermediaries in the purchase of Bitcoin, this presents a risk that most card providers are unwilling to take until further regulatory clarity is available.
The lack of regulation brings a host of legal issues with it.
Volatility is the most significant obstacle that keeps most credit card companies from offering Bitcoin purchases through their service. However, the uncertainty of a market that experiences wild ups and downs is a substantial risk to credit cards.
Banking is a risk-averse financial service besides hedge funds and other high-risk asset classes. The banks that support the credit card system are unwilling to engage in a market that could leave them significant losses.
Credit Card That Offers Crypto Purchase
Luckily, Bitcoin investors can find credit card companies that operate conducive to the crypto landscape. These financial institutions are positioning their businesses for the coming explosion in crypto use. Getting a Bitcoin credit card is as easy as finding a provider like SoFi that understands the crypto ecosystem.
The SoFi Credit Card offers cardholders a crypto gateway that is intuitive and affordable. As per the experts at SoFi:
The SoFi Credit Card now lets you redeem points straight into crypto. You’ll earn 2% cashback on all purchases and can redeem it directly into crypto with your SoFi active investment account.
Buy Bitcoin Using a Credit Card
Buying Bitcoin and other cryptocurrencies doesn’t have to be costly. Consumers can purchase a credit card that offers Bitcoin purchases and cashback benefits that make entering the crypto space a worthwhile experience.