With Bitcoin and cryptocurrencies in general blowing up in 2017, Bitcoin (BTC) is in high demand. However, for most, getting into the cryptocurrency ecosystem by purchasing Bitcoin is confusing with many cryptocurrency exchanges requiring wire transfers, ACH transfers from your bank account, or other confusing payment options.
Luckily, purchasing Bitcoin has come a long way since Bitcoin’s inception in 2009, and there are now places where you can buy Bitcoin instantly and easily with a credit card or debit card.
Coinbase is a San Francisco-based cryptocurrency exchange that has positioned itself as the go-to exchange for novice cryptocurrency users with its clean, easy to use interface. In particular, Coinbase is widely used in the United States, where it first started to offer its service. As a bonus, it accepts a variety of payment methods.
Indeed, the company is a big deal – it posted more than $1 billion in revenue in 2017 alone, which shows that the company is reliable and trusted by the cryptocurrency community (or at least widely used by it).
Coinbase has offered the purchase of Bitcoin using credit/debit cards since 2012, when it was launched. Moreover, as stated, the company is financially sound relative to other cryptocurrency exchanges with its huge revenues as well as about $216 million in investor funding (as of August 2017).
Users can register on Coinbase’s website, enter their personal details, go through the verification process, set up two-factor factor authentication (2FA) for their account, and link their Mastercard or Visa credit card to their account before proceeding to buy Bitcoin. Compared to other exchanges, Coinbase’s 4% credit card processing fee is relatively low.
Coinbase’s services are currently available in 31 countries (January 25, 2018).
Coinmama is an Israel-based cryptocurrency exchange that also allows Bitcoin purchases with credit card. Furthermore, Bitcoin purchases of $150 or less don’t require verification.
This convenience in terms of lack of verification for smaller purchases is offset by the fact that payments take 10 minutes to settle, and Coinmama charges a 6.3% processing fee on top of a 5.65% fee charged by Simplex, which screens Coinmama users by weeding out users that can’t afford to buy Bitcoin with credit card because they are likely to be defaulters.
Bitpanda is the go-to place for European Bitcoin users who want to purchase Bitcoin with their credit card.
Bitpanda is known for adhering to all of the legal frameworks laid out by regulators in Europe. It may not be convenient for Canada or US-based clients given that it is based out of Austria, where it complies with local cryptocurrency laws and guidelines.
With an email address, it takes seconds to create a Bitpanda account. Afterwards, you can verify and set up 2FA as an extra layer of security before linking your Mastercard or Visa credit card information.
Bitpanda’s transaction fees are approximately 5% with a higher exchange rate spread. There are different types of accounts which need increasingly higher amounts of identity verification as you climb up the ladder but a starter account has a €1,000 daily buying limit and €20,000 monthly limit.
Coinhouse is a lesser-known exchange that has some distinct aspects that separate it from competitors.
While Coinhouse isn’t really well-known or even covered in mainstream media or large cryptocurrency news outlets, their claims of regulatory compliance, talks of transparency, and instantaneous service may carry some weight for Bitcoin buyers looking for a reliable exchange.
This cryptocurrency exchange is tailored for those who often buy in bulk. This is because Coinhouse’s transaction fees depend on the amount of Bitcoin purchased (in Euro terms). Any Bitcoin purchase up to €5,000 attracts a 10% fee and anything beyond €20,000 is fixed at 8%.
Bitstamp’s claim to fame that it is the world’s first fully licensed Bitcoin exchange. Bitstamp rose to prominence at the height of the Mt. Gox scandal and during that time, it positioned itself as a better European-based alternative.
It came to operation in 2011 and for the last two years, it has been the second largest cryptocurrency exchange in the world.
Purchasing your Bitcoins at Bitstamp is pretty straightforward. First, you must open a personal account and verify your ID before your account is validated. If not, forget about linking your account with your credit card via Bitstamp’s card processor and purchasing Bitcoins, as identity verification is necessary.
Fees are relatively reasonable and as with Coinhouse, decrease as you increase the purchase amount. A 5% fee applies for purchases above €/$5000 and an 8% fee for anywhere up-to €/$500.
While transaction fees for Bitcoin purchases with credit card are high, one pays for convenience as credit card purchases are often quicker and can be convenient when one necessarily doesn’t have cash on hand to buy Bitcoin. However, considering the wild swings in Bitcoin prices, always be sure to only invest money which you can afford to lose in case things go haywire.