Numerous ways exist to purchase bitcoins and each way to purchase bitcoins comes with its pros and cons. Some methods are faster than others but more costly, while some methods keep your identity safe but at the cost of processing speed or security of the transaction. When we look at the most frequently used method of purchasing bitcoins then we can see that most people prefer to use their credit or debit cards to purchase bitcoins.
If we take a general look at the pros and cons of using cards to purchase bitcoins, then we can see that cards have a lot to offer.
The biggest advantage that cards have over other methods of purchasing bitcoins is that of processing speed. You can purchase bitcoins almost instantly through cards. If you have already fulfilled the prerequisites, such as a bitcoin wallet and authentication on an exchange like Coinbase, then you can purchase bitcoins with the click of a button. Within moments, the bitcoins will be transferred into your wallet.
Since credit and debit cards are connected with your bank, they are the safest way to make a transaction but this also means that your transaction data will be shared with the regulatory authorities. In addition, if you use an exchange like Coinbase then your bitcoin trail will be monitored as Coinbase has to comply with government regulations to prevent any unauthorized use of bitcoins issued from their exchange.
Another drawback of using cards is the high rate they charge on transactions. On average, cards get charged at over 3% and some cards get charged close to 5%, which is a lot compared to other methods of purchasing bitcoins.
Nevertheless, these drawbacks cannot overshadow the utility of cards when it comes to purchasing bitcoins because what most people look for is the processing speed and ease of payment. Since most people are already acquainted with using their cards for everyday purchases, they feel it easier to use cards to purchase bitcoins.
Now that we have covered the pros and cons of using cards, let us look at debit cards. Credit cards and debit cards are virtually similar when it comes to purchasing bitcoins, they both have the same pros and cons but debit cards have lower transaction limits compared to credit cards.
Buy And Sell Limits
These limits vary from one website to another and users may find different limits based on a ranking system on a single platform. Coinbase, for example, has a multi-level system where buying limits are assigned to accounts based on their verification level. Low-level verification accounts can transact up to $150-$300 a week. These limits, as mentioned above will vary with the bitcoin exchange that you choose to use. Apart from this one hiccup, debit cards offer no obstacle in the purchase of bitcoins. For most beginners this limit should not be an issue, if however you are a seasoned investor and make frequent high-value transactions in bitcoins then you may prefer bank transfers as they offer a lower flat rate and have no caps and floors.
How To Purchase Bitcoins With A Debit Card
Let`s talk about the core of this matter. You have made up your mind about purchasing bitcoins and have scoped out the bitcoin exchange of your choice. Good, now what next? First, you need to make sure that you have fulfilled the prerequisites.
Get a bitcoin wallet. Bitcoin wallets come in many different forms, you can get an online wallet, desktop wallet, paper or hardware wallet. If you are a beginner then you may prefer to use the online digital wallet offered by Coinbase. Simply log on to the website, submit your data which is necessary to complete the registration process. Submit your card details, this is necessary if you want to carry out bitcoin transactions through Coinbase. It may take up to a week to get your card and account details verified but once you have completed these prerequisites, you can get started with the actual transaction.
Select A Payment Method
It is simple to buy bitcoins instantly with debit card or credit card on platforms like Coinbase. Here is a short step-by-step tutorial on how you can get started with buying bitcoins.
Go over to the payments section and select your debit card as your payment method. Once you have done this you can go over to the transaction page, select the number of bitcoins that you want to purchase, you can, of course, purchase partial bitcoins.
Once your transaction is processed, you should receive confirmation and your bitcoin wallet will show that you have received the bitcoins.
Now you have successfully purchased bitcoin with your debit card or credit card using the Coinbase platform.
There are a few things to keep in mind before purchasing bitcoins.
- Check up with your local laws and regulations first. Although bitcoin has been around since 2006, countries have been slow to embrace it completely, while many countries across the world accept bitcoins, there are still many that do not recognize bitcoins as a legal tender or have outlawed them due to the risks attached. For this reason, it is always better to check up your local regulations before purchasing bitcoins and if you intend to travel and use bitcoins during your travels then make sure to check up the laws and regulations related to bitcoins for your travel destination.
- Although we have mentioned Coinbase as an example in the article, this doesn`t mean that we are promoting Coinbase. There are many bitcoin exchanges operating in the market and each exchange tries to differentiate itself from others.
- Before choosing an exchange, carry out your own due diligence first. Each exchange offers different rates and terms, try to scope out the one that suits your needs the best and try to avoid scam exchanges.
- The rate of bitcoin offered by each exchange will be different because bitcoin doesn`t have a single set rate. It will be wise to have a look at the rates of different exchanges and work out an average rate and then compare that with the rate that you are getting.