Can you buy crypto with a credit card on binance
If you’re ready to take the next step and want to buy some bitcoin, take the next step with Binance!
Binance, the world’s largest crypto exchange based on trading volume, will now let you spend money you don’t have after it added support for credit cards from Visa and Mastercard.
Credit card usage in crypto is controversial. Aside from the risk — ask anyone who bought crypto last year… — top exchanges have gone back and forth on support. Coinbase, for example, stopped allowing credit card purchases a year ago but, when it still allowed them, customers were found to have incurred additional charges.
With many crypto owners getting “rekt” by a slump that has seen the market crash by around 90 percent, with some tokens now effectively worthless, the winds of change in the bear market are interesting to observe.
Coinbase is abandoning its conservative approach to the coins that it lists, while Binance — which operates on the opposite scale with support for a glut of tokens — has moved from being crypto-only to offer fiat currency options to customers. Support for credit cards is a major part of that, and it brings Coinbase and Binance into direct competition for the first time.
The company, which is officially based in Malta, has opened fiat currency trading outposts in Uganda and Jersey, and it has plans to add similar ramps in Liechtenstein, Singapore and other places.
CEO Changpeng Zhao told TechCrunch last year that Binance plans to grow to 10 fiat exchanges in 2019, with “ideally two per continent.” Part of the strategy is to help larger, institutional investors bring money into the crypto ecosystem, a move that he believes will boost Binance and the crypto industry generally.
The credit card support has come via a partnership with crypto-focused payment company Simplex, but there are caveats.
Credit cards can only be used to purchase a limited set of tokens: Bitcoin, Ethereum, Litecoin and Ripple’s XRP.
There are also geographical limitations. The Simplex service isn’t supported in some countries, while, in the U.S., it doesn’t cover the following states: New York, Georgia, Connecticut, New Mexico, Hawaii and Washington.
Finally, support for banks is not universal, which means that some users will not be able to buy on Binance using their credit card.
Those that can are charged a 3.5 percent fee and must wait 10-30 minutes for their tokens, a Binance spokesperson confirmed to TechCrunch. Once purchased, those tokens can be freely traded on Binance, which claims to list more than 150 cryptocurrencies.
Still, the move may bolster the exchange’s trading volume, which, while still the highest in the industry, has dropped below $1 billion per day in recent times.
At the time of writing, the exchange had traded some $666 million worth of crypto in the last 24 hours, according to data from CoinMarketCap. A lot of that depression is down to the market plummet, which has seen the overall value of that trading volume fall, and reduced consumer interest in trading, but giving more people the tools to buy might offset that somewhat.
“The crypto industry is still in its early stages and most of the world’s money is still in fiat. Building fiat gateways is what we need now to grow the ecosystem, increase adoption and introduce crypto to more users,” Zhao said in a canned statement.
Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.
Credit cards are one of many ways to buy crypto with fiat currency.
While credit cards offer convenience and speed, they also come with unique risks.
In this article, you’ll understand the pros, cons, and fees associated with using a credit card to purchase crypto.
The answer is yes. Many users prefer credit cards for a variety of reasons. Here’s why you should consider using one to buy crypto.
Some users prefer wallets or bank transfers to buy crypto. These methods incur the lowest fees, but they can be slow for someone that likes convenience and speed. In this case, credit cards are the best option. At Binance, you can buy crypto with everyday fees using a VISA or Mastercard credit card. Alternatively, Binance also provides crypto purchases via bank transfer, fiat deposit, and e-wallet.
If you’re interested in buying crypto with a credit card, check if your card issuer and payment network allow the transaction type. Credit card issuers that block crypto purchases have varying reasons. Capital One, for example, decided to decline cryptocurrency purchases to protect cardholders from fraud, losses, and market volatility.
Note: To ensure your credit card is suitable, we recommend double-checking before initiating any crypto transaction with your credit card issuer.
What Are The Different Types of Credit Card Fees?
Credit card fees come in all shapes and sizes. Below, we’ve outlined the most common fees you might incur, depending on your situation.
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 around 2%. Any additional fees will come from the bank and credit card provider’s side.
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.
Foreign transaction fee
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.
Why Should I Buy Crypto With a Credit Card?
Now that you understand the fees associated with using a credit card, here are all the benefits of using one to buy crypto — which often outweigh the cons.
1. 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.
2. 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.
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 do I Buy Crypto With a Credit Card?
Have you done all the research on your credit card provider? If so, here’s how you can start buying cryptocurrency on Binance with a credit card.
Step 1: Log in to your Binance account and click [Buy Crypto], then [Credit/Debit Card].
Step 2: Choose your fiat currency and enter the fiat amount you would like to purchase. The system will automatically display the amount of crypto you can buy.
Step 3: Click [Add new card], then enter your credit card details. Please note that you can only pay with your own credit cards.
Step 4: Enter your billing address and click [Add Card].
Step 5: Double-check your payment details and confirm the order.
Note: After one minute, Binance will recalculate the price and the amount of crypto you receive. You can click [Refresh] to see the latest market price.
Step 6: You will be redirected to your bank’s OTP Transaction Page. Follow the on-screen instructions to verify the payment.
Read our step-by-step guide to learn how you can easily buy crypto via credit card on Binance.
If you want to dollar-cost average (DCA) your crypto portfolio or automate your crypto buys with a credit card, you can consider using Recurring Buy. It allows you to set a weekly, bi-weekly, or monthly plan and the coin and amount you want to purchase on a recurring basis. For more information, read How To Grow Your Crypto Portfolio with Recurring Buy.
A credit card is just one of many ways to buy crypto. Although credit cards incur higher transaction fees, they are simple, instant, and don’t require cash on hand. Users who prefer a more cost-effective approach can consider using a bank transfer. However, unlike credit cards, bank transfers often take days to process. Before you pick a suitable payment method, it’s crucial to educate yourself on the pros and cons of each one.
Ready to start your crypto journey with Binance?
Sign up for a Binance accountor download the Binance crypto trading app. Next, verify your account today. Once your account is verified, there are three main ways to buy cryptocurrencies on Binance using fiat: you can buy crypto with fiat from Binance via bank transfer, card channels or e-wallets options.
Buy BUSD, BNB and cryptocurrencies with a Debit Card, Credit Card, or via Bank Transfer.
Linking your debit card, credit card, or bank account (available in many regions) is one of the easiest ways to buy Bitcoin and more than 200+ cryptocurrencies.
Disclaimer: Cryptocurrency investment is subject to high market risk. Binance is not responsible for any of your trading losses. The opinions and statements made below should not be considered financial advice and are shown to illustrate an example. They are not intended to serve as investment advice or recommendation.
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