Why Are Banks Banning Cryptocurrency Purchases Using Their Credit Cards?

The wave of banks banning the purchase of cryptocurrency with their credit cards is growing while Wells Fargo is now on these types of bans. Many other banks, such as Chase, Bank of America, Citigroup and others, are also part of this new trend that limits the purchase of cryptos.

Debit cards, it seems, can still be used to buy crypto (check with your bank to be sure of their policy), but using credit cards to buy crypto has replaced these banks leading these purchase restrictions , and it probably won’t be long before this ban becomes standard.

It seems that overnight purchases are starting to be canceled when credit cards are used to buy crypto, and people who had no problems before buying crypto with their credit cards are starting to notice that they no longer have allow to make these purchases. The volatility of the cryptocurrency market is the factor here, and the banks don’t want people to spend a lot of money which will be a struggle to pay if a major drop in cryptocurrency happens like at the beginning of the year.

Of course, these banks will also lose money if people buy cryptocurrency and the market will improve, but apparently they have decided that the bad is better than the good when it comes to gambling with their credits. card. It also protects the consumer because it limits their ability to get into financial trouble by using credit to buy something that could leave them cash poor.

Most investors who use credit cards to make cryptocurrency purchases are probably looking for short-term gains, and have no plans to stick around for the long haul. They hope to get in and out quickly, then pay off the credit cards before the high interest rates begin. properties with a declining market. Now they’re paying interest on the lost money, and that’s not good. This, of course, is bad news for banks, and this is the reason for the current and growing trend of banning the purchase of crypto using credit cards.

The lesson here is that you don’t need to raise a line of credit to invest in crypto, and only use a percentage of your hard assets to make crypto purchases. These funds should be funds that you can lock in for the long haul without breaking your budget.

So, don’t get caught putting money into cryptocurrency that you need soon only to find that a downturn takes money out of your pocket. There’s an old saying, “Don’t gamble with money you can’t afford to lose,” and that’s the lesson banks want people to learn as they venture into this new realm of investment. .