ETHERLive
ETHERLive delivers real-time price and volume data across 16+ exchanges to users in a clear and easy-to-understand package. Users can get up-to-the-second updates for each exchange/currency pair, as well as aggregated market averages for each exchange, currency, and the market as a whole. It also provides a global converted average of all the currency pairs monitored by ETHNews, converted to USD.

---

24hr ---
--%
Tuesday Oct 23rd 2018
RESOURCES

The Basics

Learn the basics of Ethereum and various cryptocurrency technologies

Learn More

What is Ethereum?

Understand the underlying principles of the Ethereum Platform

Learn More

The Blockchain

Discover the revolutionizing technology known as the blockchain

Learn More
SUBMIT

Press Release

Submit a press release for consideration on ETHNews

Submit Press

Story / Dapp

Submit a story or DAPP to be considered for publication on ETHNews.

Submit Story

Explanation

Submit "Ethereum Explainer" content for consideration to be featured on ETHNews

Submit Topic
ETHNews Logo
---
--%
Home
News
Etherlive
Ether Price Analysis
Resources
Contact Us

Buy Cryptocurrency With A Credit Card? A Warning From Coinbase

By

Matthew

De Silva

WriterETHNews.com

In their rush to buy cryptocurrencies, some investors have made purchases using credit cards. For reasons such as default risk and fraud protection, this could be problematic. Now, some credit card companies are reportedly classifying cryptocurrency purchases as cash advances.

According to a recent survey conducted by LendEDU, nearly one in five bitcoin investors made their cryptocurrency purchase using a credit card. Of that subset, 77.87 percent reported that they paid off their credit card balances after purchasing bitcoin, while the remaining 22.13 percent said that they did not pay off their credit card balances in full. This means that one in 25 bitcoin buyers carries the debt over to at least the next month.

As observers warn of a bubble, purchasing bitcoin – or other cryptocurrencies – on credit seems to be a risky proposition. And financing a cryptocurrency expenditure with ongoing debt is downright mad.

Some credit card companies have welcomed cryptocurrency customers with open arms. In a statement to ETHNews, a representative for American Express discussed the lender's partnership with a peer-to-peer payments company to facilitate crypto transactions:

"In a similar way that our card members can link their card to certain digital wallets, they can also link their card to an Abra wallet and load a modest amount of money. The limit is $200 a day, up to $1,000 a month. Abra's wallet can in turn be used to purchase bitcoin in US dollars." 

On the other hand, Capital One told ETHNews that it "has started declining credit card transactions to purchase cryptocurrency due to the limited mainstream acceptance and the elevated risks of fraud, loss, and volatility inherent in the cryptocurrency market." A company spokesperson added, "Capital One continues to closely monitor developments in cryptocurrency markets and exchanges, and will regularly evaluate the decision as cryptocurrency markets evolve."

One bitcoin investor who wished to remain anonymous said she considered buying bitcoin with her credit card because of the fraud protections that many companies offer. It's unclear which companies would actually reimburse a customer for lost or stolen bitcoin.

An additional challenge for credit card companies looking to facilitate cryptocurrency purchases is that some customers might use international exchanges. If these exchanges lack appropriate KYC protocols or operate under false pretenses, then the credit card company might struggle to reverse fraudulent transactions.

Furthermore, the risk profile of cryptocurrency consumers as a whole might also give pause to major credit card companies.

Late last night, in a reddit post, a Coinbase staff person notified customers that some credit card companies are seeking to reclassify digital currency purchases as cash advances. Others confirmed receiving an email from the exchange.

Source

If you are planning to buy the dip on credit, you may want to check in with your card's customer service department.

Matthew De Silva

Matthew has a passion for law and technology. He graduated from Georgetown University, where he studied international economics and music. Matthew enjoys biking and listening to tech podcasts. He lives in Los Angeles.

ETHNews is committed to its Editorial Policy

Like what you read? Follow us on Twitter @ETHNews_ to receive the latest credit card, Coinbase or other Ethereum business and finance news.