PROs and CONs of Buying Crypto With a Credit Card
Call me old-fashioned but nobody can ever convince me that buying cryptocurrency suing your credit card is a good idea and a financially sound wealth-building strategy. That's bollocks!
It took years for friends and family to convince me to even try crypto. I started out with the free faucets. I figured since it was free the only thing I would waste would be my time testing the platform. Sadly, a few of the faucets I tried were a waste of time. Also an investment platform that I tried took my crypto and ran! So far Coinbase is proving to be reliable. Even so, I would never use a credit card to buy crypto. I choose to AVOID THE DEBT TRAP! Don't you know that people have committed suicide over this??
I have used credit cards for cash advances. Cash Advance? Crypto? To me it's the same thing. Either way it's a form of currency and when you use a credit card it creates a debt. If your financial situation is already precarious, why make it worse by creating debt? You might bury yourself in debt. Most people want to invest in crypto to enhance their wealth not bury themselves further under.
Cryptocurrencies are known for their price volatility, but people believe in its long-term growth and adoption. I believe! But I don't believe enough to put myself in debt. Suppose the crypto I buy using a credit card does not increase in value? Suppose I'm one of those unfortunate people who gets hurt because of a scammer like FTX? I lose my crypto but my credit card debt is still there and I have to pay it!
Below is a quick list of the PROS versus the CONs.
PROs of Buying Cryptocurrency with a Credit Card:
Convenience: Using a credit card is a quick and easy. No need to link your bank account. No need to through a lengthy verification process sometimes required on cryptocurrency exchanges.
Instant Access: Credit card purchases are typically immediate.
Rewards and Cashback: Some credit cards offer rewards, cashback, or points for purchases.
Emergency Funding: In the event of an urgent investment opportunity or market movement, a credit card can serve as a source of quick funds when your other resources are not readily available.
CONs of Buying Cryptocurrency with a Credit Card::
High Fees: Buying cryptocurrency with a credit card can be expensive.
Interest Charges: If you carry a balance on your credit card after buying cryptocurrencies, you will incur interest charges, making your investment more costly.
Credit Score Impact: Using a credit card to buy cryptocurrencies can affect your credit score. (This might happen in America. I'm not sure about other countries.)
Volatility Risk: If you buy cryptocurrencies with a credit card and their value decreases significantly before pay off your credit card balance, say Hello! to financial difficulties.
Cash Advance Limit: Most credit card companies account for cryptocurrency purchases the same as for cash advances. I have used cash advances and the fees are high and there is a strict limit on the amount. Also, my rule is only use cash advances for DIRE LIFE EMERGENCIES.
Security Concerns: If your credit card information is compromised or stolen, it can be used to make unauthorized cryptocurrency purchases, potentially resulting in financial loss. (THIS IS THE BIGGEST CON!!)
Lack of Control: It's very easy to accumulate debt, especially if you have no self-control.
OK! I've said it! Even though I think my words are falling on deaf ears because there are still people out there who say you use a credit card to buy crypto. Ah well! If you disagree with me and think you can handle this, then you know what they say. "Be true to your heart". I'm not a financial advisor or expert. I'm just being true to my heart.. That's why I won't buy crypto with a credit card.
RELATED LINKS:
Can you buy crypto with a credit card? Ye, but ...| Fortune Recommends
How to Buy Bitcoin With a Credit Card in 2023 | Investopedia
It’s easier than ever to buy crypto with a credit card—but here’s what to know first | CNBCMakeit
