How to Buy Bitcoin and Other Crypto With a Credit Card

Cryptocurrency has been around in some form for more than a decade, but has become increasingly mainstream in recent years. Gen Z Canadians, for example, are more likely to invest in crypto than mutual funds or individual stocks, according to a study released in 2023 by the FINRA Investor Education Foundation and CFA Institute[1].

As people learn more about digital currencies, a common question is how to buy crypto with a credit card. Though it can be done, the process typically comes with fees and may not be worth the risks. Cryptocurrency can be a highly volatile investment, so it’s worth weighing the pros and cons before using your credit card to purchase it.

How to buy crypto with a credit card

Buying cryptocurrency with a credit card isn’t a direct process. You have to go through an intermediary source, such as a crypto exchange — a third-party company that facilitates crypto transactions. Here’s how to do it:

Step 1: Check your credit card’s fees for buying crypto

There are two types of fees you might encounter when buying crypto with a credit card:

Cash advance fees. Some credit card issuers consider cryptocurrency purchases to be cash advances — and as such, they typically come with higher fees, higher interest rates and no interest-free grace period. For example, a card’s cash advance interest rate may be 22%, with a $5 cash advance fee per transaction. If that’s the case and you buy a cryptocurrency valued at, say, $4,458 (the price for one Ethereum, as of this writing), you would owe roughly $86 in interest and fees after the first 30 days.
Foreign exchange fees. Many credit cards in Canada charge a foreign transaction fee (such as 2.5%) whenever you make a purchase in a currency other than Canadian dollars.

Step 2: Use a cryptocurrency exchange that accept credit cards

Some cryptocurrency exchanges allow you to use your credit card to buy Bitcoin and other digital currencies, but they tend to charge significant fees.

For example, an exchange may charge as much as 9.75% per transaction or a minimum fee of $10.

The upshot is that credit card transactions typically go through immediately, compared to other methods, which may take a day to clear. However, options like bank wires and Interac e-Transfers are often free.

Step 3: Pay your credit card bill

If your credit card company considers crypto purchases a cash advance — as many do — you’ll start incurring interest from the day of the purchase. Therefore, it’s a good idea to pay off your balance as soon as possible, even before you receive your statement.

Is buying cryptocurrency with a credit card worth it?

Buying crypto with a credit card might be convenient and allow you to get into the market immediately, but the fees are typically high, the debt will have a high interest rate, plus cryptocurrency can be a risky investment.

To come out ahead, you’d have to hope that your investment gains will be higher than the fees you’re paying. Since nothing is guaranteed, you’d essentially be gambling. If things don’t turn out in your favour, you’d still have to pay off your credit card bill at the end of the payment period — or watch that debt grow.

You may not earn rewards

Credit card issuers typically don’t let you earn points or miles on cash advances. So a cryptocurrency purchase may not qualify for rewards. Be sure to check the terms and conditions on your credit card to determine if you can actually earn points, miles or cash back for cash advances.

Not all credit card issuers allow crypto transactions

The biggest hurdle to buying crypto with a credit card is arguably how banks view crypto. Some financial institutions see cryptocurrency purchases as too risky. As a result, they may block you from using your credit card to buy crypto.

Other ways to buy cryptocurrency

Using a credit card to pay for cryptocurrency likely won’t make sense for most people. Fortunately, there are other ways to buy cryptocurrency that can cost you much less in fees, including:

Bank transfer or wire transfer.
Interac e-Transfers.
Debit card.
Cash via cryptocurrency ATMs (special machines that allow you to insert cash to purchase certain types of crypto).

Remember, each method of payment may come with its own fees. Before buying crypto, be sure you understand the cost of your transaction.

FINRA Investor Education Foundation and CFA Institute, “https://rpc.cfainstitute.org/-/media/documents/article/industry-research/Gen_Z_and_Investing.pdf,” accessed July 10, 2024.

About the Authors

Georgia Rose

Georgia Rose is a lead writer on the international team at NerdWallet. Her work has been featured in The Washington Post, The New York Times, The Independent and The Associated…

Barry Choi

Barry Choi is a freelance personal finance and travel expert. His website moneywehave.com is one of Canada's most trusted sites when it comes to all things related to money and…