Cryptocurrency is one of the world’s fastest-growing economic sectors. It exists in many different forms, somewhere between a currency and an investment, with Bitcoin being the biggest and most well-known. Though bitcoin began as a niche financial product, it has grown in popularity and is now colliding with credit cards in a number of intriguing ways.
- As cryptocurrencies such as Bitcoin gain popularity, they are starting to interact with credit cards.
- Some exchanges, including some bitcoin ATMs, enable you to purchase Bitcoin using a credit card.
- A newly established credit card provides bitcoin incentives, and additional similar cards are set to follow.
A Bitcoin ATM is an internet-connected kiosk where you can buy Bitcoin and other cryptocurrencies. You may be able to use cash, a debit card, or a credit card for the transaction, depending on the machine and network. Bitcoin ATMs are becoming more popular, with over 30,000 kiosks in the United States as of February 2022. 1
Though they are usually referred to as bitcoin ATMs, these kiosks are less capable than standard ATMs. Bitcoin ATMs, unlike bank-owned ATMs, only enable you to purchase bitcoin and do not distribute cash. Most Bitcoin ATMs also limit the quantity of bitcoin that may be purchased at one time. Bitcoin ATMs often charge fees for use and may not provide the cheapest price for bitcoin.
Buying Cryptocurrency With a Credit Card
There are many methods for purchasing Bitcoin and other cryptocurrencies, including using a credit card. However, not all cryptocurrencies may be bought with a credit card, and not all exchanges accept them. Even on bitcoin exchanges that allow credit card purchases, the fees might be fairly high.
Another thing to bear in mind is that, since bitcoin is fundamentally a money, many banks and credit card companies see it as a cash equivalent. As a result, your card may handle a bitcoin transaction similarly to an ATM cash advance. That means you may be charged extra fees, and you will almost certainly be charged interest beginning on the day of the withdrawal.
Credit Cards With Bitcoin Rewards
A credit card that delivers bitcoin rewards is one of the most recent breakthroughs at the junction of cryptocurrency and credit cards. BlockFi, a cryptocurrency-based lender, announced in December 2020 the launch of a new credit card that offers incentives in bitcoins. Visa’s Bitcoin Rewards Credit Card was already available to BlockFi subscribers, and the general launch date was set for July 6, 2021. 2 BlockFi’s credit card is expected to earn 1.5% back (in bitcoins) on all purchases, with a further 3.5% back in crypto after the first three months of use. 3
On the flipside, since the rewards are paid in bitcoins, you will be able to participate in any Bitcoin price gain, but you will also be vulnerable to greater volatility (and possible loss) than with a regular cash back rewards card. Nonetheless, other Bitcoin credit cards are anticipated to be issued in the near future.
The Bottom Line
The worlds of cryptocurrency and credit cards are becoming more entwined. There are now 20,000 Bitcoin ATMs where you can purchase Bitcoin and other cryptocurrencies, and more are being introduced on a monthly basis. Many exchanges allow you to purchase cryptocurrencies using a credit card, however you should be wary of exorbitant fees and other expenses.
Other bitcoin rewards credit cards as of February 12, 2022 include
-Upgrade Bitcoin Rewards Visa Credit Card4
-SoFi Credit Card5
-Venmo Credit Card7
Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is very dangerous and speculative, and this article is not a suggestion by Investopedia or the author to do so. Because every person’s circumstance is different, a knowledgeable specialist should always be contacted before making any financial choices. Investopedia makes no guarantees or warranties about the accuracy or timeliness of the information provided on this site.
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