One of the most fascinating developments in financial services in recent years has unquestionably been the rise of cryptocurrencies. These digital currencies have helped to make digital payments more accessible than they had ever been previously.
Indeed, one of the most popular and instantly recognisable cryptocurrencies – Bitcoin – has come to be used by ever-more people, from around the globe, for purchasing goods and services. Growing numbers of businesses are also starting to accept cryptocurrencies and payment gateways, and this trend shows no signs of slowing down.
Despite its popularity, many people are still hesitant to use Bitcoin due to the perceived volatility of the currency, and what they fear would be the complexity of trying to buy it with a credit card. But is this a fair perception?
Below, we took a closer look at the main steps involved in buying Bitcoin with a credit card. Hopefully, after reading, you will be in no doubt that the process is a lot simpler than you previously imagined.
A short introduction to cryptocurrencies
So, first things first: what is cryptocurrency, and what are cryptocurrency payments?
In short, cryptocurrency is a form of digital money that operates independently of a central bank, on its own network. Crypto uses cryptography as a means of securing and verifying transactions, and it is decentralised. This means it is outside the control of any given single entity or government, which is a true boon for many customers who are looking for an alternative to traditional banks.
Bitcoin is the best-known type of cryptocurrency, but there are many other coins available such as Ethereum, Litecoin, Ripple, and Dogecoin, with each of them having their own advantages and disadvantages. Of these, Bitcoin is the most famous and widely used. So, what is Bitcoin?
Bitcoin is a type of digital currency that was created in 2009 by an anonymous person or group by the name of Satoshi Nakamoto. Unlike traditional currencies like the US dollar, Bitcoin is decentralised and isn’t controlled by any government or central bank. Instead, transactions are verified and confirmed through a process called mining, which involves powerful computers solving complex mathematical equations to verify each transaction.
The nature of the Bitcoin network makes it difficult for anyone to manipulate or counterfeit it. One can safely say, then, that the enhanced security offered by Bitcoin is a real plus point for those who frequently feel anxious about where their money goes.
What do you need to know about cryptocurrency payments?
As the name suggests, the term “cryptocurrency payments” refers to the act of using cryptocurrencies – such as Bitcoin – to pay for and purchase a range of goods, services, and/or investments. The high levels of security around Bitcoin make it appealing, and there are other advantages that we will take a closer look at below.
- Low rates
One of the main reasons for crypto’s popularity is that fees tend to be much lower than when debit and credit cards are used. This is because cryptocurrency payments are not associated with mainstream, centralised banks. Depending on the type of cryptocurrency you use, the transaction may be totally free.
- A shield against inflation
Another often overlooked benefit of crypto is that it can offer protection against inflation, thanks in large part to the basic concept of supply versus demand.
Put simply, there are a limited number of total Bitcoins that have been, and ever will be, created. This means that as the growth of the money supply outperforms the growth of the Bitcoin supply, the Bitcoin price will increase, making this a great option to guard against inflation.
- Enhanced security
In order to access your crypto wallet, you will need a specific, dedicated crypto key – and unless you have this, you will not be able to access your finances. This includes if you lose or misplace your own key.
The blockchain system is also the key behind the cryptocurrency system, and this includes a series of computers, connected in a network. These verify the transactions made, offering a smart, secure way to store and manage your crypto.
- Faster transactions
Payments and transactions made using cryptocurrency also tend to be much faster compared to those made with traditional banking.
Crypto payments are typically completed within a manner of minutes, compared to the 24 hours that a wire transaction can take, or the three to five days that other traditional transactions can take.
- Transparency
Blockchain transactions are also celebrated for their transparency. The decentralised nature means that money transfers and transactions can be easily viewed, including live transfers. This helps to lower the risk of fraud and corruption.
- Diversification
Another major benefit to cryptocurrency is that it allows you to build a more diverse investment portfolio, rather than relying solely on traditional financial assets such as stocks and bonds. The aforementioned protection against inflation also allows you to generate steadier, more predictable returns.
- Accessibility
Bitcoin and other forms of cryptocurrency are also accessible, increasing their reach and their appeal to many users.
Compared to traditional financial institutions such as banks, crypto does not require any identification checks or verification, and there are no credit or background checks. Not only does this make the process faster, but such digital currencies are also more accessible as a result.
Is it possible to purchase Bitcoin with a credit card?
So, now that we have established the main pros of crypto, it is time to return to the main question: can you purchase Bitcoin with a credit card? The answer is yes – and the steps are relatively quick and straightforward.
- Research the best credit card
Before heading to your favoured Bitcoin exchange, make sure you do your homework to find the best credit card option. Not all credit card providers will support purchasing Bitcoin, so you will need to find an eligible provider.
Some of the more established credit card names that do allow Bitcoin to be purchased include:
- American Express
- Visa
- Mastercard
Each card will have its own charges and fees which come from the exchange, so you should make sure you do your homework before committing to a provider. Some exchanges may also charge you a little extra for using specific credit cards, so this is something else you should look into.
- Research the most suitable Bitcoin exchange
When you have found the right credit card, you will need to find a Bitcoin exchange that will allow you to use the card to purchase Bitcoin.
Even if you find an exchange that accepts credit cards for the purchase of Bitcoin, you should do additional research to find out how long the process will take; some exchanges require a validation process to reduce the risk of fraud.
When choosing an exchange, do your research to ensure you pick one with a good reputation. Read reviews, and do your homework to check that the exchange you choose is likely to be genuinely reliable and trustworthy.
- Link the credit card to the exchange
Once you have found a suitable credit card and an exchange that will let you use it, you will need to link the card to the exchange and complete the verification requirements.
In most cases, you can simply follow the “add new card” requirements and complete details such as your full name, and card details such as expiry date and card number, as well as a billing address.
Although this can be time-consuming, it helps to reassure you that the exchange you choose is secure and safe, and that your information and details will be protected and secured while you make transactions and financial decisions.
- Buy your Bitcoin
The final step is to head to your chosen exchange, and select the option to “buy Bitcoin”. You will then be given a list of payment options, and you can choose to pay with a credit card. In most cases, your bank will issue you with a one-time password (OTP) – all that you need to do is follow the instructions, and you will receive your Bitcoin.
The exact process may vary from one exchange to the next. However, the basic structure is likely to mirror the one described above. This means that in a short space of time, you will be able to purchase the Bitcoin you desire with your credit card – with that Bitcoin, in turn, able to be used for subsequent purchases and transactions online.
- Repeat the process
Once you have found a credit card and a Bitcoin exchange that works for you, you will be in a perfect position to start investing in Bitcoin, with the minimum of stress and fuss.
So, let’s go through that process again…
Did you understand everything we laid out above? If not, let’s take you through the procedure once more, in a few sentences.
Buying Bitcoin with a credit card is a straightforward process. To get started, sign up for a reputable cryptocurrency exchange like New Age Crypto Exchange (NACE). Create an account and complete the verification process. Once verified, log in to your account, navigate to the ‘Buy’ or ‘Trade’ section, and select Bitcoin as the cryptocurrency you want to purchase.
From there, choose ‘Credit Card’ as your payment method, enter the amount of Bitcoin you wish to buy, and provide your credit card information. Review the details, confirm the transaction, and your purchased Bitcoin will be added to your exchange account’s wallet.
Keep in mind that credit card purchases might involve fees, and the availability of this option can vary based on your location and the exchange’s policies.
There you have it! If you have any further questions about how NACE could profoundly impact how you engage with cryptocurrency for the better, encompassing any of our renowned solutions, please don’t hesitate to contact us.
