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Topic: Can anyone explain why it is bad to to buy Bitcoin with Credit Card? - page 3. (Read 1240 times)

hero member
Activity: 1442
Merit: 629
Vires in Numeris
I have always seen the Internet advise against it. Although I have made profit in this way.
You were lucky, that the price has not fallen by the end of the repayment period...
Just imagine, that you have no funds to buy bitcoin, just a credit card, with the credit line of e.g. $1,000
You have bought 0.33 bitcoin on 1st August, (price was ~$2,900), so you paid $957 with your credit card.
To make it easier, let's say you have 1 month period, when you can pay back your credit without interest.
On 1st September, bitcoin price was $4,850, it means you had $1,600 worth bitcoin. When you have paid back your credit, the net profit was $643. (nice profit for one month investment...)
But if you have bought 0.2 bitcoin on 1st September (paid $970 by credit card), and let's assume that on 1st October the price of the bitcoin will be about ~$3,500, that means that you have to pay back the $970 credit, but your bitcoin worth only $700 the net loss is $270. You have to pay this back from your own funds, or, if you have no funds available, bank starts to calculate interest from the 1st September, and on 2nd October, your $270 net debt starts to increase because of the ~30% interest rate (p.a.) of the credit card.
hero member
Activity: 728
Merit: 500
Well, that is simple to explain, most "digital thiefs" use bitcoin for launder the money, so they steal credit cards, banks accounts, and they do all their stuff in order to buy bitcoin with that money, and once that they have the bitcoins, they make a proccess and the money is fully-laundered. That is why buying bitcoin with credit cards is so difficult, and if you find one, you are not going to be able to buy more than 0.02 every 24 hours.
full member
Activity: 196
Merit: 100
Decentralization shall be the end of the Old World
You mean going into debt to buy bitcoin?
If you do, then the price might fall, then you won't have the funds to pay back the credit.

Or you pay back slowly over time, then end up paying lots of interest.  It isn't just Bitcoin that is bad to buy on credit cards, everything is bad if you don't pay it off at the end of the month.

Yes  that is a general disadvantage when buying anything with Credit card though. Anyway, while trying to buy Bitcoins, all credit card options are either extremely sparse or overpriced. It's extremely difficult to buy with Credit, why though? Is there a economic reason to this?
legendary
Activity: 1218
Merit: 1003
You mean going into debt to buy bitcoin?
If you do, then the price might fall, then you won't have the funds to pay back the credit.

Or you pay back slowly over time, then end up paying lots of interest.  It isn't just Bitcoin that is bad to buy on credit cards, everything is bad if you don't pay it off at the end of the month.
full member
Activity: 196
Merit: 100
Decentralization shall be the end of the Old World
I have always seen the Internet advise against it. Although I have made profit in this way.
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