6 min readMay 18, 2022

HOW TO BUY ALTCOINS WITH A CREDIT CARD IN 5 EASY STEPS

19/05/2022

By Damilola Ogungbayi olushola

INTRODUCTION

Credit card is one of the various payment
methods to buy crypto other than fiat deposit or e-wallets.

Credit cards are also the fastest way to buy crypto.

WHAT ARE THE DIFFERENT TYPES OF CREDIT CARD FEES

1.Transaction fees:

Cryptocurrency exchanges charge a small fee for credit or debit card transactions. This is usually higher than other popular payment methods like bank transfers. At Binance, we charge one of the lowest fees of up to 2%. Any additional fees will come from the bank and credit card provider’s side.

2.Cash advance fees:

A cash advance is when you borrow cash directly from your credit card provider. You’ll pay 3-5% of the amount in fees. For instance, a $200 cash advance would incur $6-10 in fees.

Some credit-card crypto transactions are processed as cash advances. For instance, American Express charges crypto transactions as a cash advance. In this situation, you’ll either pay $5 or 10% of the transaction amount, whichever is greater. So, if you purchase $1,000 in cryptocurrency, you could be paying a $100 fee to your credit card issuer.

Note: Credit cards provide a 20-day grace period to pay off purchases if you are timely with your monthly balance. Cash advances, however, accrue interest from day one.

If these fees don’t suit your preference, consider Binance. Since we only accept VISA and Mastercard credit cards, Binance users will never have to pay a cash advance fee.

3.Foreign transaction fees

Users who buy crypto with USD via a credit card on a platform based outside the US are likely to incur a foreign transaction fee. This scenario also applies to users whose credit cards are issued domestically but are buying crypto with other fiat-issued currencies. Foreign transaction fees are typically around 3% of the transaction amount. For example, if you purchased $1,000 in cryptocurrency, you would pay a $30 fee.

BENEFITS OF BUYING ALTCOINS WITH CREDIT CARD

1.Fast and instant:

The speed of credit cards makes it easy for first-time buyers or investors to purchase crypto with fiat currency. Credit card transactions are completed in a matter of seconds.

Conversely, bank and wire transfers often take three to eight days. As a result, the cryptocurrency cannot be moved off the exchange until the transaction is complete. For investors who are looking to buy the dip in a bear market quickly, a credit card is an ideal choice with the instant speed it offers.

2.Credit cards allow you to invest without having cash on hand:

Every crypto user knows the market moves fast. A few days could be the difference between buying a coin at the bottom or, even worse, its peak. Perhaps your salary might arrive next week. You won’t need to worry if you have enough cash on hand with a credit card. Just pay your bills at the end of the month to avoid accruing interest from your credit card provider.

3.Beginner-Friendly:

Credit cards are an ideal payment method for beginners who don’t want to wrestle with the confusing methods on more advanced crypto exchanges. For crypto beginners especially, checking out with a credit card is familiar. Simply enter your card number, expiry date, and CVV, and you’re all set. Plus, credit-card-friendly crypto exchanges and platforms are often very intuitive and user-friendly.

4.Earn rewards via staking:

“All the transaction fees accumulated will wash out rewards earned from credit card crypto purchases” — this is a common misconception and depends on how you use your crypto. Today, many crypto financial products such as staking provide attractive yields. For some, these products are a powerful passive income vehicle. For example, you can easily buy crypto with your credit card, then stake it on Binance Earn and earn up to 20% APY.

WHAT ARE THE RISKS OF BUYING CRYPTO WITH A CREDIT CARD?

Now that you know the benefits of using a credit card for crypto, you should also be aware of the potential risks associated with the process.

1. Your credit card information could be at risk:

Today’s crypto landscape is saturated with exchanges touting their unique benefits. Some of these exchanges are legitimate businesses. However, many of these exchanges are scams looking to exploit newcomers or users eager to make a quick profit. While credit cards have strong fraud protection, every user should have the ability to identify and steer clear of a scam. At Binance, we recommend users always do their due diligence before making any crypto purchase.

2. Your credit score could be impacted:

Credit utilization refers to the amount of credit you use. It’s also a significant factor in your credit score. The more credit you use, the higher your credit score. Too much credit, and you’ll damage your credit score. In the worst case, this damage piles up while you fall behind on your monthly credit card bills. To avoid this situation, we recommend users only buy what they can afford to lose. Newcomers especially should start with small amounts and consider using a dollar-cost averaging strategy via Recurring Buy.

Note: Credit card providers and banks enforce a maximum limit on the amount of cryptocurrency you can purchase every day. Users who make bulk crypto purchases should check if they are within their daily limit. Otherwise, the credit card transaction will be declined.

HOW TO BUY ALTCOINS WITH CREDIT CARD ON BINANCE?

The process of buying altcoins with a credit card on Binance is so simple. it all comes down to following five simple steps. Here they are:

Step 1:

Step 2:

Choose your fiat currency and enter the fiat amount
you would like to purchase.

Step 3:

Click [Add new card], then enter your credit card
details and billing address. Click [Add Card].
Please note that you can only pay with credit cards in your name.

Step 4:

Double-check your payment details and confirm the
order.
After 1 minute, the price and the amount of crypto you will get will be recalculated. You can click [Refresh] to see the latest market price. The fee rate is 2% per transaction.

Step 5:

Verify your payment on your bank’s OTP Transaction
Page.Once this is done, the cryptocurrency will appear in your spot wallet!

CONCLUSION

Buying altcoins with a credit card is a good idea if there is an opportunity on the market and you want to take advantage of it. However, it is important to remember that this payment method is often subject to a higher commission. You can also use a credit card when you currently don’t have cash but want to leverage a buy opportunity. You should remember, however, that in case of not paying the debt on time, the bank can charge huge fees!

To get started click on the link below

https://www.binance.com/en/buy-sell-crypto?channel=card&fiat=EUR?ref=331234001