Tips Before Buying a Bitcoin with Credit Card

Currently, the bitcoin is flowing in-and-out of the news. If you’re unaware of what it is, here’s its brief introduction. The bitcoin is a cryptocurrency or in simple words, a form of electronic cash. It is a decentralized currency without a bank that can be transferred from peer-to-peer without the need of intermediaries. It was sufficient to understand the bitcoin. So, instead of going into much depth and digging out the history, this write-up will directly focus on how to buy bitcoin using the credit the credit. And yes, it will also cover all tips to consider while buying a bitcoin.

What To Consider While Buying A Bitcoin With Credit Card?
·    Impact On The Credit Score
First of all, the buyer should know how much credit he/she will be using. The credit utilization ratio (CUR) is a major factor in calculating the credit score. Utilizing the credit card frequently lowers the credit score. If a credit card with low scores is used for buying the bitcoin, it will impact them in a negative manner. However, once the debt is cleared, the credit scores bounce back.

·    Transaction Fees
The bitcoin buyer should expect more percentage of processing fee for the purchase. There are many exchanges that charge different processing fees according to their policies. Assuaging the transaction fee is possible by purchasing a bitcoin without using the credit card.

·    Foreign Transaction Fee
A foreign transaction fee is charged from the bitcoin buyer who purchases the bitcoin from an exchange based outside the country. For example, if an individual is using an American credit card buys the bitcoin from an exchange based out of the United States, the foreign transaction fee will be charged.

·    Cash Advance Fee
Earlier in 2018, the financial service providers like Visa and MasterCard enlisted the cryptocurrency purchases as cash advances. It simply means charging a higher fee with an increased rate of interest. These factors prevented from earning a reward on a purchase that can be redeemed later. Therefore, before making a purchase for the bitcoin using a credit card, ensure if your purchase is categorized a cash advance.

·    Debt
The cryptocurrency is highly volatile. If a buyer buys a bitcoin using a credit card with a less credit score and the prices drop, there is a possibility of landing into debt. Thus, the experts suggest buying bitcoin with a credit card having a high credit score.

Advantages of Buying A Bitcoin Using Credit Card
The biggest advantage of buying the bitcoin using a credit card is to earn the rewards. If the purchase is not classified as the cash advance. Not only this, but the buyer also buys the bitcoin because it is a great financial leverage. If the bitcoin is treated as a purchase, the credit card allows using the large credit lines for greater profits.

Buy Bitcoin with Credit card is a great move, however, the person should think before taking a dip of investment to make the profit. The bitcoin industry is an interesting industry and it is never going into a debt.

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