What is Bitcoin?
We don’t think we’ve seen a single day this year that the world’s largest cryptocurrency didn’t feature in the news. Whether Elon Musk is tweeting bitcoin advice or yet another financial institution touts crypto as a legitimate currency, bitcoin seems to be everywhere.
Launched in 2009 as a decentralized alternative to the current banking system, bitcoin is a digital currency that is free from government influence and facilitates cheap, cross-border transactions that are transparent and secure. Leveraging advanced cryptography and blockchain technology, bitcoin transaction data is recorded and stored permanently. The data is irrefutable and it is impossible to alter.
In recent years, bitcoin has been seen as a store of wealth – comparable to gold in the 1970s – and is argued as a suitable hedge against inflation, much like real estate. Bitcoin is featured on every cryptocurrency exchange in the world and is one of the most frequently traded assets in the world too.
What’s the Difference Between a Debit Card and a Credit Card?
Both credit cards and debit cards are proving popular ways to buy bitcoin online at cryptocurrency exchanges and brokers. That’s right – you can also buy crypto with a debit card. While both card types are born from the same family, there are some very important differences. For those wondering whether to buy bitcoin with a debit card or a credit card, we at Crypto Parrot have identified the difference between a debit card and a credit card for your convenience.
- Credit vs Balance – A debit card is linked to your bank account or has a balance amount placed on it if using a prepaid card solution. It is your money being spent directly, whereas a credit card is just that – a line of credit. It can be repaid at a later date and means you can make a purchase without having any actual capital at the time of buying bitcoin.
- Rewards – Banks may offer some small perks in this day and age for using a debit card but they are rarely substantial. Credit cards, on the other hand, feature major rewards programs that can include frequent flyer points, cashback, and other worthwhile gifts.
- Better protection – Credit cards offer better consumer protection against fraud compared to that of protection at banks for debit cards. Although cryptocurrency is still a grey area for both card types when it comes to deposit insurance in some jurisdictions.
- Fees – Since the cards operate differently, we can expect fees to differentiate also. It’s possible to get a bank debit card that is essentially fee free while credit cards usually have several different fees such as annual maintenance fees and interest on repayments.
What are the Best Credit Cards in Canada?
One look at the credit card market and you’ll probably notice 3 common brands appear. That’s because when it comes to credit cards, Visa, Mastercard, and American Express are the only names you’ll ever need to know. While the services these companies provide are similar, there are some large differences. Our payment experts at Crypto Parrot have conducted a thorough guide of the best credit cards for buying bitcoin.
American Express, or AMEX is a world-renowned credit card company that is typically associated with limitless cards that depict major wealth and are world-famous for an amazing rewards program. There are over a dozen different American Express credit cards available in countries around the world and recently American Express can be used on the Android and Apple Pay virtual payment systems.
Cashback rewards – American Express is world famous for its rewards program and its cashback rewards can be significant. In fact, the cashback rewards on offer can often be as much as 5% higher than that of Visa or Mastercard.
Limitless – If you are a high earner and financially responsible, Amex offers several limitless credit cards. That means there is no limit to how much bitcoin you can buy in any given month.
High Fees – American Express fees are generally higher than Visa or Mastercard. Especially the annual fee which is quite famous for being higher than all other comparable credit cards.
Paid in full – Some credit cards let you pay your balance off over time if you need too. However, many American Express cards won’t allow this. You won’t be able to use your credit card next month if you haven’t paid off the debt from the previous month first.
Visa and Mastercard
Although Visa and Mastercard are two different payment networks, they are so dominant and globally accepted that they are often spoken of together. We at Crypto Parrot can understand why, because when all is said and done there isn’t a great deal of difference between these two industry giants. They both provide very comparable credit and debit cards at all entry points and their benefits and drawbacks are very much the same.
Premium Cards – In the last decade, Visa and Mastercard have been able to compete with the top AMEX cards by offering comparable premium cards that offer massive reward programs and higher credit limits
Good Returns – Both these credit card companies offer a good rate of return – although Visa is superior in this department – which is great if you are regularly buying bitcoin.
Lower Annual Fees – AMEX costs more. Visa and Mastercard charge far lower annual fees than AMEX. With some other options even waiving the first year.
Weaker Rewards – Generally, the rewards programs of Visa and Mastercard simply don’t stack up to those on offer at American Express. However, they have come a long way.
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How to Buy Bitcoin with a Credit Card?
Buying bitcoin with a credit card couldn’t be easier – if you have ever made a shopping purchase online, then you’ll be right at home. The best cryptocurrency exchanges have made sure the process is super simple and very fast. Now Crypto Parrot wants to take any doubt out of that first purchase and that’s why we have the ultimate guide for you.
If you haven’t already, it is time to register an account with a licenced and regulated cryptocurrency exchange or broker.
- Press sign-up or register from the exchange website or directly from the mobile app. You’ll be asked to provide some personal details like name, address, and your contact information. All basic stuff – fill in the prompts and confirm your details.
- Next, the exchange will get you to create a username and password. Standard procedure so that you can easily access your account as quickly as possible. Make sure to create a strong password since you want to adequately protect your crypto asset – we suggest a pass phrase rather than a simple password.
- Since you are trading at a regulated exchange or broker, you’ll need to complete a Know Your Customer (KYC) procedure. Another easy process here. Just take some photos of your ID and proof of address to provide to the exchange. You may be asked to take a selfie too, to prove that you are who you say you are – registering an account is so much fun!
- Verification will take a few days, depending on the exchange of choice, but once processed you’ll be free to use your credit card to buy bitcoin.
Now comes the really easy part. Using a credit card to fund your cryptocurrency account will take literally a minute at best – Just navigate to the cashier section of the crypto exchange or broker:
- Choose a credit card from the available payment methods and nominate a deposit amount.
- Next, you’ll just need to input your credit card details. So simply enter your long card number, and expiry date from the front of the card, and then the 3-digit CVV number that is located on the rear of the card.
- That’s it! Take a look at your account now because most exchanges should process credit card payments instantly – with a credit card you can buy crypto instantly. You can now buy bitcoin instantly or any other cryptocurrency of your choosing.
We at Crypto Parrot like to take good care of our fellow crypto traders. Now you are armed with a full account, we have curated an easy guide to help you buy bitcoins with a credit card on the exchange marketplace.
- Find bitcoin from within the crypto exchange marketplace or use the exchanges search function to access bitcoin directly. Bitcoin is the most popular cryptocurrency in the world, so you won’t have any problem finding it. Feel free to check out some altcoins too – who knows what the next big thing will be!
- From within the buy window, you will see the total coins you’ll receive for the amount you wish to invest. The spreads, margins, and any fees will be calculated and displayed also. If you like what you see, simply press buy to receive your first bitcoin.
- Once again, this should be processed instantly. Your digital assets will appear in your account balance. Purchased bitcoin is stored within an online wallet provided by the cryptocurrency exchange. You can transfer your assets to your own crypto wallet if you choose to.
That was so easy, right? In 2021, buying bitcoin with a credit card is so simple and fast. Some exchanges will let you store your credit card details, so you won’t even have to input any card details when you go to increase your balance ahead of your next crypto buy!
Why Use a Credit Card?
Every payment type has its own unique advantages and reasons to be used as a means to buy bitcoin. Credit cards offer several unique and important benefits when buying bitcoin and cryptocurrency exchanges and brokers online.
Let’s go over the pros and cons of using a credit card to buy bitcoin online.
Convenience – Credit card payments are totally reliable, very safe, and its familiarity is so very convenient. Just pull out your card and input the details within seconds! Credit cards are even more convenient when you save your card details at your cryptocurrency exchange.
No transaction fees – Most cryptocurrency exchanges don’t charge transaction fees for buying cryptocurrency, including bitcoin, with credit cards. Also most exchanges offer fee free deposits and withdrawals when using credit cards.
Cash advance fees – This is one shame of the 50/50 acceptance of cryptocurrency by major banks across the world. Unfortunately some banks and institutions will view cryptocurrency purchases, including exchange funding, as a cash advance. Most credit cards have a one-time charge for every cash advance and that charge can be as high as 5%.
No rewards access – Most credit card rewards programs won’t count cash advances towards any points systems or towards any cashback bonuses. So if your credit card does see your crypto purchases as a cash advance, you’re going to miss out on some of the advantageous credit card rewards.
Decreasing acceptance – We recently noticed that major cryptocurrency exchange, Coinbase has ended support for credit card payments – although they are still accepting current credit card payments, you can’t add a new card anymore. This may be a growing trend and will potentially result in lower acceptance.
With instant deposits, fast withdrawals, and global acceptance at cryptocurrency exchanges, credit cards are the perfect option to buy bitcoin online.
Credit cards are reliable, secure, and can fund a crypto exchange in seconds. Most exchanges don’t charge any fees for depositing with a credit card either, which makes credit cards one of the cheapest ways to buy bitcoin online. With help from our dedicated Crypto Parrot team, you can now register an account at a top cryptocurrency exchange and buy bitcoin with a credit card!
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Buy Bitcoin with a Credit Card FAQS
💳 What is the best credit card for crypto buys?
With so many credit card options available around the world, those wishing to invest in bitcoin using credit cards will need to compare several similar credit cards. The best credit card for buying cryptocurrency is entirely dependent on the needs of the individual user. To see if this is the best provider for you, be sure to read our crypto payment guides at CryptoParrot.
✔ What is the best alternative to bitcoin?
There are over 7,000 different cryptocurrencies available across the globe. Each digital asset offers its own unique benefits and attempts to solve a financial problem. The best alternative, however, will always depend on your trading goals and the state of the cryptocurrency market at any given time. Curious to find out more? Check out our guides to altcoins at CryptoParrot.
💲Can I use other payment methods?
Thankfully, in the modern world, there is more than one way to buy bitcoin in Canada and Canadians have many different payment methods available to them. Which payment method is accepted will depend on the exchange or broker you choose, so you won’t always have to buy crypto with a credit card. We have plenty of guides to making deposits at a cryptocurrency exchange in Canada.