The crypto space is booming nowadays, and if you also want to ride on this bandwagon that may take you to the moon, this guide is for you. Set aside 15 minutes of your time and read it with great focus so you can understand everything.
The guide is aimed to help you understand crypto exchanges, know common things about purchasing BTC, and do so using a credit or debit card in just 5 minutes, and then finally securing your coins. That said, let’s dive right in:
Part 1: Introduction – Buying BTC & Cryptocurrencies via Credit or Debit Card
There’s no doubt, buying Bitcoin using your credit card or debit card used to be a challenge in the past. A handful of exchanges allowed people to fill their wallets with BTC, and even among those, many were wolfs under sheep’s clothing, blatantly scamming people.
However, with the boom of the cryptocurrency market in the past few years, things have changed; Bitcoin and altcoins are more accessible to common people than ever. And with strict laws and regulations, buying BTC and other cryptocurrencies, for that matter, has become safer.
With the launch of crypto exchange platforms like Coinbase, Bitpanda, and Coinmama, the process for buying cryptocurrencies has become much safer and faster. We’ve listed three top exchanges that are proven to be reliable for buying crypto using your debit or credit card.
Note: You will need a crypto wallet before buying the cryptocurrencies, as some exchanges require this.
Part 2: Let’s Talk About Bitcoin Exchanges Supporting Debit or Credit Card
Nowadays, many exchanges support credit and debit cards for buying bitcoin and other cryptocurrencies, but Coinmama stays the top choice because of its smooth and safe process and worldwide availability. Let’s talk about it in detail below:
It is a bitcoin broker specializing in allowing bitcoin purchase using a debit or credit card. The exchange charges a fee between 4.9% and 5.9% because of the risks and some transaction fees that are associated with credit cards. With Coinmama, you have high purchase limits; you can buy up to:
- $5,000 worth of BTC every day
- $20,000 worth of BTC every month
After you’ve verified your account and made a purchase, your BTC will land in your account in just a few minutes. The best part is that it allows credit card purchases to almost anyone globally, including Australia. Here are some pros and cons of using Coinmama:
- Available in almost all countries
- Very high buying limits for BTC using a credit card
- Highly reliable and trusted
- Very easy to use
- Instant transaction
- Fees can be a little high compared to other debit/credit card BTC brokers
There are two more highly trusted exchanges that allow the purchase of bitcoin using a credit card, but Coinmama takes the crown, which is why we did a small review on it. However, we’ll tell you how to buy BTC using a credit or debit card from Coinmama and the other two exchanges in the fourth part of this guide, so keep reading.
Part 3: Some Frequently Asked Questions Regarding Buying Bitcoin with Credit and Debit Cards
Before we move towards the part you’re desperately waiting for – buying BTC with a credit or debit card, let’s go through some FAQs, so you know the basics of BTC buying.
Are there any risks with buying bitcoin via a credit card?
Yes, there are always risks involved when you’re doing a financial transaction, especially when it’s something a bit complex like buying cryptocurrencies. However, you can mitigate the risks by doing your homework and work with a reliable and reputable exchange. Since it’s the brokers that try to cheat their users, it is crucial for you to only work with a trusted and regulated exchange.
Some brokers try to collect credit card information by selling bitcoins and use that information to make fraudulent purchases. Besides this, there can also be some cash advance fees, so make sure to ask your credit card issuer about their policies on bitcoin purchase.
Can I use a debit card to purchase BTC via a bitcoin ATM?
No, at this time, most bitcoin ATMs only accept cash. However, you can first use a normal ATM to get cash using your debit card and then use that cash to buy BTC from a bitcoin ATM.
What are the benefits of purchasing BTC with a Debit or Credit card?
Firstly, it is one of the easiest ways to get your hands on some bitcoins – it’s also the fastest! Since most people know how to make online purchases using debit or credit cards, it will be easier for less technical Aussies to buy BTC online.
What are the disadvantages of buying BTC via a Credit or Debit Card?
There are a few of them, but if you know your stuff, which you will by the end of this guide, you can avoid the drawbacks and buy safely.
The first disadvantage is the limit on buying large quantities of BTC using a debit card or credit card. Secondly, the fees are higher, and lastly, if you don’t work with a reliable exchange, there can be a risk of fraud.
Can crypto be bought with a stolen credit card?
No, this is absolutely not possible because you will have to go through the ID verification first before making a purchase, so a stolen card won’t work. Plus, it’s illegal to do so, which is why no one should attempt this.
Can I buy BTC anonymously using a credit card?
No, since you need to go through the verification process first, you won’t be anonymous when buying crypto with a credit or debit card.
Can I purchase BTC via a pre-paid debit card?
There’s ambiguity around this because most exchanges will not allow you to buy BTC using a pre-paid debit card. However, you can try to exchange BTC locally with a pre-paid debit card using LocalBitcoins, it’s a platform that lists independent sellers in your region, but there’s always risk of fraud when dealing directly with other people.
Can I buy BTC through multiple exchanges if the limits are not high enough?
Yes, you can absolutely do this. In fact, many people buy this way. If you find Coinmama’s limit too low, you can open a Coinbase account and buy from both exchanges simultaneously.
Is it risky to share my ID with the exchange?
In order to buy BTC and other cryptocurrencies, you will have to go through a verification process and share your ID details. Now it depends on how trusted the exchange is. It’s just like when you give up information online to buy anything, there’s always the risk of the data getting compromised because of the website getting hacked. The same risk is there with crypto exchange platforms.
However, being financial institutes, bitcoin exchanges are always under attack from hackers, which is why they employ some of the best security measures to protect their platforms and users. Therefore, your data might be safer here than other websites you share your personal information with.
But keep in mind, there’s always a looming risk of data compromise when you share information online; we have the example of Yahoo getting hacked – 400 million accounts’ information was stolen.
How to determine what the best way to purchase BTC is?
The best way to do so is to read about every exchange we’ve discussed below and make sure that it’s trusted and available in your country.
Plus, read about its fees policy to ensure there are no surprises at the end. You can also try multiple exchanges with small purchases to see which one works best for you.
Can I buy less than a bitcoin?
Yes, a majority of crypto traders do this on a daily basis, so you can buy a fraction of one BTC easily. Each bitcoin can be divided up to the eighth decimal place, which means it can be broken down into 100,000,000 pieces. Each bitcoin unit i-e 0.00000001 is known as one Satoshi.
So the gist is, when purchasing bitcoin, you don’t really have to purchase a full BTC; buying up to 8th decimal is possible and done frequently by traders.
Most BTC brokers will let you enter the amount of fiat currency (your AUD) at the buying page, and you’ll be shown the equivalent BTC amount. If you hit the purchase button, you’ll get that exact amount of BTC in your account.
For instance, if one BTC equals to 50,000 AUD and you want to purchase BTC worth of 1300 AUD, you can get roughly up to 0.03 BTC. This can be more or less depending on how much fiat currency you’re willing to spend. But make sure to know the exchange platform and credit card fees beforehand.
This is also the same for when you’re selling BTC, as you can enter the bitcoin amount you want to sell, and the exchange will give you the equivalent fiat currency in return. So if you sell 0.03 BTC, you’ll get 1300 AUD back, assuming the value of BTC is 50,000 AUD. If the value changes, the exchange rate will obviously change as well.
Can I leave BTCs in my exchange platform’s account after buying them?
Although you can do so, we strongly suggest keeping your BTCs or any other cryptocurrency, for that matter, in a secure place and your crypto wallet is the most secure place online.
Many exchange platforms have been hacked in the past and lost their users’ funds, which is why to store the coins in your wallet as soon as you buy them.
Can I buy other cryptocurrencies using a Debit or Credit Card?
This depends on the exchange you’re working with. For example, Coinbase allows you to buy Etherium and Litecoin using your credit card. While Coinmama supports Etherium, Litecoin, and Bitcoin purchases. The simplest method is to first buy BTC and then purchase any currency you want using it.
Why are credit card fees so high for buying cryptocurrencies?
Credit cards help you buy things easily and faster. When you use a credit card, you are borrowing money from the card-issuing company. Since you are not spending your own money, it’s easier to refuse payment to the company when they demand the money back. Plus, credit card companies usually take their customer’s side over the merchant and charge around a 3 percent processing fee from the merchants.
So because of these reasons, it’s expensive and risky for merchants to accept credit card payments. Hefty fees, chargebacks, and other frauds are considered before a merchant accepts a credit card as a payment method. So the cost of these factors is included in the form of fees from you when you make a credit card purchase.
This is especially challenging for the merchant when it’s a financial transaction in exchange for money, like buying bitcoin, because once it lands in your wallet, the transaction cannot be reversed.
Why I have to purchase bitcoin using a credit card to buy other cryptocurrencies?
This is because bitcoin is sort of a globally accepted cryptocurrency, and almost all cryptocurrencies are traded against it. The liquidity for alternate coins is usually very low against fiat currency, but BTC has a very high trade volume and liquidity against fiat currency.
So because of this, it’s very easy to buy other currencies using bitcoin as compared to buying other cryptocurrencies without getting BTC first.
Part 4: Complete Process of Buying Bitcoin Using Top 3 Exchanges in Under 5 Minutes
Now is the part you’ve been waiting for; getting your hands on those BTCs. Remember we mentioned walking you through buying bitcoin using your credit or debit card from CoinMama and two more exchanges? Well, those two are Coinbase and Bitpanda.
You can further study these exchanges on their official websites about fees and other conditions and sign up for the one you like the most. So with that said, let’s start with CoinMama first.
Buying Bitcoins with Credit/Debit Card on CoinMama
Before buying the BTCs, you will have to create an account on CoinMama, and submit your required ID details. After the verification process, you’ll be allowed to buy bitcoin. Follow the steps below for clarification of the process.
- Log into your account
- Enter all personal data in the fields for account verification
- Submit your ID photo (you may also be required to upload a selfie)
- Select the payment method from SWIFT, SEPA, Faster Payments, or Credit/Debit card (choose the last one)
- Select the amount of bitcoins you want to buy (you’ll have options to buy some more coins as well)
- Now enter your bitcoin wallet address details because the BTC will be sent there once the payment is processed
- Next, enter the credit or debit card details like you do when shopping online
That’s it! You’ll get the BTC in your wallet.
Buying Bitcoins with Credit/Debit Card on Coinbase
Before buying the BTCs, you will have to create an account on Coinbama, and submit your required ID details. After the verification process, you’ll be allowed to buy bitcoin. Follow the steps below for clarification of the process.
- Go to the Coinbase website and click on ‘Get Started’ at the top right corner
- Fill in all the information it asks for and click on ‘Create Account’
- After creating the account, you’ll be asked to confirm your personal details and login credentials. Then you may be asked to submit your ID document’s scan, do this to move to the next step.
- Once you’re on the account dashboard, your name will show on the top right corner, click on it to get a dropdown menu, click on the ‘Settings’ option there. Different options will show up; you need to click on the ‘Payment Methods’ button.
- Now you’ll be directed to the payment page. There, click on the ‘Add a Payment Method’ button at the top right corner.
- There will be multiple payment methods, including Bank Account, PayPal (for withdrawal only), and Debit/Credit card. Select the last one.
- Please note that Coinbase currently only works with Mastercard and Visa. So only proceed if you have any one of their supported cards.
- You’ll have the dialog box for card details, enter everything like you do when shopping onlineNow go to the ‘Buy’ page, enter the BTCs you want to buy, and click on Buy Bitcoins.
That’s it! Your BTCs will instantly land in your wallet.
Buying Bitcoins with Credit/Debit Card on BitPanda:
Before buying the BTCs, you will have to create an account on BitPanda, submit your required ID details and wait for verification. After the verification process, you’ll be allowed to buy bitcoin. Follow the steps below for clarification of the process.
- Login to your BitPanda account and click on the ‘Buy’ button located at the top bar. You will be redirected to a page with options to buy Bitcoin or Etherium, and there will be different payment methods listed; choose Visa/MasterCard and enter the amount you want to spend on buying Bitcoin.
- Now go over the details like coin type, payment method, and the amount you entered, and then proceed next. You will be able to see the exchange rate in the ‘Current Price’ field. It might be 3-4% higher than the market rate because BitPanda’s fees are added to the exchange rate.
- Also, you only have 60 seconds to lock in the exchange rate as the market keeps fluctuating. Once everything is done, and you’ve checked on the policy boxes, click on the order button.
- You will now receive a phone call SMS for verification. Enter the pin code you get in the next field and click on ‘Verify Pin.’
- Now click on the ‘Click here to start payment process’ button. Remember, you only have 10 minutes to make payment after this, or you’ll have to go through the process once again.
- On the next page, add credit card details via mPAY24 and press the ‘Bezahlen’ button.
That’s it! Your BTCs will instantly land in your BitPanda account; check ‘Trade History’ to confirm this order. You can now withdraw BTC in your wallet.
Part 5: Safeguarding Yourself from Theft & Scams with Secure Storage
If there’s one thing we want you to take from this article is to NEVER STORE YOUR BTCs ON EXCHANGES! People who do this cannot be scammed as the coins are in their personal wallets, and only they know the passwords. There are many examples of exchanges getting hacked, resulting in millions of dollars in losses. Here are two of them:
- BitFinex got hacked, and as a result, its users lost over $70 million
- Mt Gox got hacked, and the users lost over $450 million
We can go on and on about the examples, but we believe you get the gist. And besides this, if an exchange gets hacked, its users’ credit or debit card info also gets stolen, which can then be used for frauds. So ALWAYS remember these two principles when buying BTCs to avoid getting scammed and losing your funds:
- Do proper research about the exchange before joining it. Check its ratings, reviews, regulations, and security information.
- Never store your coins on any exchange, no matter how secure it is. Always stuff them in your wallet.
Besides a virtual wallet, you can also store bitcoin in hardware wallets, which are basically high-security USB drives made only to store cryptocurrencies. Some of the most popular ones include:
- Ledger Nano X
- Ledger Nano S
- TREZOR One
- TREZOR T
And so on. You can look up the internet to find a more recent and securer wallet.
Well, that’s a wrap! We hope you now know how to securely purchase BTCs using your credit or debit card. The process is simple, but you need to work only with a reputable exchange. Once done, secure the coins away in your virtual or hardware wallet, and you’re good to go.