Edited by: Nick Ellis
& Kellie Jez
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Cryptocurrency has rapidly grown into one of the most popular investment options for young people today. In fact, CNBC reports that 83% of millennial millionaires own cryptocurrencies and 53% have at least half of their wealth in crypto.¹
While purchasing investments via credit card isn’t especially common, you may be wondering whether it’s possible to do so in order to earn rewards on those transactions.
It is certainly possible to purchase crypto with a credit card, but it’s more difficult than you may think, and there can be significant pitfalls to be aware of.
Let’s take a look at the process of buying crypto with a credit card and some of the downsides you’ll need to consider before doing so.
A quick disclaimer before we go any further: if you’re considering using a credit card to purchase crypto (or any other investment) because you don’t currently have the disposable income in your checking or savings account, we highly advise against you doing so. In fact, we strongly advise against using a credit card for any purchase if you don’t have the ability to pay off the card in full each month.
Now, to answer our original question: can you buy crypto with a credit card?
Technically you can — but you’ll likely find that it’s not very easy to do so.
For starters, some crypto exchanges, like Coinbase, do not allow credit card payments for U.S. customers. Further, even if you do find an exchange that does allow credit card purchases, your credit issuer may decline the transaction.
If you’re interested in purchasing crypto with a credit card, here’s the process you should follow.
In addition to the difficulty you’re likely to encounter when purchasing crypto with a credit card, there are also a few pitfalls and fees you’ll want to look out for.
One item you’ll want to keep an eye out for is the fee the exchange may charge to process your credit card transaction. These fees can often be upwards of 4% of the transaction, which can really add up if you’re making a large transaction.
Further, when you compare this to the fee you might be charged for a debit card or ACH transaction (these could be 0.5%, 0.35%, or even free depending on the exchange you’re using), making the purchase with your credit card starts to feel like a losing proposition.
Even if your credit card transaction goes through on an exchange, you’ll need to be wary about how that purchase is coded on the issuer’s end.
Credit issuers could treat a purchase of crypto as a cash-like transaction, and thus charge you a cash advance fee, which is usually $10 or 3% to 5%, whichever is greater.
This cash advance fee is in addition to the fee you may be charged for using a credit card, meaning you could end up owing upwards of 9% of the total transaction in fees — hardly worth it by any measure.
To make matters worse, if your issuer categorizes crypto purchases as cash-like transactions, then you’re unlikely to earn any rewards for these purchases.
That’s right, not only will you be subject to higher fees, but you also won’t earn rewards for that purchase to help offset the fee you’ll pay.
Finally, if you try to purchase crypto with a credit card, and your issuer thinks it is a fraudulent or unusual charge, it may freeze your card until it’s verified that you are indeed the person trying to make the purchase.
Instead of trying to purchase crypto with a credit card, you could earn a bit of crypto each time you make a purchase by way of a credit card that offers crypto rewards instead of cash-back rewards. Here are a few of our favorite options:
Gemini Credit Card
Those with the Gemini card can earn crypto rewards in 1 of the platforms’ 40+ supported assets in real-time as soon as they swipe their card. The card gives you 3% back on dining purchases (on up to $6,000 in spend), 2% crypto-back on grocery purchases, and 1% crypto-back on all other purchases.
The Gemini card does not charge an annual fee or any foreign transaction fees.
For those looking for a way to spend their current crypto holdings, the Coinbase card allows you to do just that. It immediately converts your crypto to dollars to complete transactions and allows you to earn up to 4% back in crypto when doing so.
That said, you should keep in mind that Coinbase charges you a 2.49% fee to convert your crypto into cash in order to immediately spend the balance. However, if you choose USDC as your payment method (a stablecoin pegged to the price of the U.S. dollar), you will not be charged the 2.49% fee and will still earn crypto rewards.
As with other cards, there is no annual fee to use the Coinbase card, and it can be used to complete purchases anywhere in the world that Visa is accepted.
Voyager Debit Mastercard
The Voyager Debit card is another excellent option for those looking to earn crypto. Not only can you earn a 9% APY on USDC deposits with Voyager (with no lockup required to earn), but you can instantly spend your USDC anywhere Mastercard is accepted, and earn 1% to 3% back in crypto on purchases.
While the Voyager Debit card hasn’t fully rolled out to all customers yet, those with a Voyager account can pre-register for the card through the mobile app.
Hot Tip: Read all about our favorite credit cards that earn crypto rewards in our complete guide!
Ultimately, while you can technically use a credit card to purchase crypto, it can be difficult to get the transaction to go through, and it rarely makes sense for most people given the fees that can be associated with doing so.
Given that, you’ll most likely be better off purchasing crypto using your debit card or via an ACH transfer. That said, those who are looking to earn additional crypto passively might want to consider adding a crypto-rewards card to their wallet in lieu of a traditional cash-back card.
If you’re just getting started on your credit card journey, read through our guide on the best credit cards for young adults and professionals.
The information regarding the Voyager Debit Mastercard was independently collected by Upgraded Points and not provided nor reviewed by the issuer.
The information regarding the Gemini Credit Card was independently collected by Upgraded Points and not provided nor reviewed by the issuer.
The information regarding the Coinbase Card was independently collected by Upgraded Points and not provided nor reviewed by the issuer.
In order to purchase crypto with a credit card, you need to find both an exchange that accepts credit cards as a payment method and a card issued by a company that will allow you to use it for crypto purchases.
While it isn’t especially difficult to find crypto exchanges that will accept a credit card as a payment method, many credit issuers will not allow their cards to be used to purchase crypto. And if they do, the purchase will likely code as a cash advance (which brings higher fees).
It depends. Some credit issuers will process crypto transactions without issue, others will not allow them at all, and some will code them as cash advances.
For those that treat them as cash advances, you’ll usually be charged $10 or 3% to 5%, whichever is greater, on the amount of the transaction.
Coinbase does not allow purchases of crypto with a credit card for U.S. customers. You’re only permitted to use a debit card or ACH transfer from your bank.
There can be! You may be subject to fees from the exchange in order to process the credit card, and you may be charged cash advance fees if your credit issuer determines it to be a cash-like transaction.
Given that, if you’re being charged both of those fees, it would seldom make sense to use your credit card for these purchases.
There could be many answers to this question. However, it’s most likely that the exchange you’re trying to make a purchase with doesn’t accept credit cards or your credit issuer doesn’t allow your card to be used for crypto transactions.
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