Cryptos are the new-generation digital currency. Many people have found it as an exciting method to do transactions. The future of crypto got boosted when Elon Musk promoted it vociferously and even considered selling his Tesla car in exchange for cryptocurrencies. Nowadays, people are investing a lot of money in cryptocurrencies.
One exciting approach that they have taken is to buy crypto with credit cards. Using debit cards for such transactions has already been the approach for a long. Using a credit card for this purpose has opened several arenas and possibilities. However, it also has its own list of cons as well. Let us look at some of the pros and cons of using a credit card to buy different cryptocurrencies.
Pros of using a credit card to buy cryptocurrency
- Credit cards allow users to use money that they do not possess. This money is something that the issuing bank is providing the user for temporary usage. As a result, the user has more money at their disposal to buy cryptocurrencies.
- When users utilize debit cards for buying cryptos, they are paying their own money. No person can have unlimited money at their disposal. Therefore, they used to face a restriction in the number of coins that they can buy. However, with credit cards, users can buy an innumerable number of cryptos.
- Every credit card comes with a particular cash limit. This limit restricts the user from taking money from the bank after a certain amount. However, the users also have the option of increasing their cash limit if required. They can contact their issuing bank for such purposes. Increasing the limit of their credit card provides more money for them to buy cryptos.
- Regular buying and selling of cryptos will also have a positive impact on the credit score of users. This credit score is important for several bank-related purposes. If you want to apply for a new credit card or increase your credit limit, you need to show your credit score.
- You can use your credit score to get new credit cards, which you can use to buy new cryptocurrencies. As a result, you can apply this positive feedback loop and extract the benefits out of it.
Cons of using a credit card to buy cryptocurrency
Along with the pros of using a credit card for buying crypto coins, you also need to consider certain cons associated with the process. Some of them are:
- Credit cards charge a lot of interest on the money being credited. The user has to pay a lot more money than they would have invested for cryptocurrencies. Such interest charges keep on piling up if the user fails to pay any installments.
- Credit cards also issue a transaction fee. This transaction fee may be quite high, and as a result, the overall profit of the users from cryptocurrencies decreases.
These are some of the pros and cons you will face if you buy crypto with credit cards. Make ample preparations for such outcomes to have a hassle-free transaction.