As more banks join the trend of those who have outlawed using credit cards to buy cryptocurrencies. Wells Fargo's support for such restrictions rises. Several other banks are also a part of this new development. That is restricting the purchase of cryptocurrencies. Including Chase, Bank of America, Citigroup, and more.
It seems that buying cryptocurrencies may still be done using debit cards. (check with your bank to confirm this). But the use of credit cards to buy cryptocurrency has changed. As a result of these banks setting the standard with these purchasing restrictions. It won't be long before this restriction becomes the norm.
When credit cards were used to acquire cryptocurrency. Seemingly overnight transactions started being canceled. And customers who had never had any issues. Buying cryptocurrency with their credit cards. Started noticing that they weren't longer able to do so. Banks don't want customers to spend a lot of money. That will be difficult to repay if a significant cryptocurrency drop occurs. As it did at the beginning of the year, and this is caused by market volatility in cryptocurrencies.
Of course, these banks will also lose out on the revenue generated. When consumers buy bitcoin and the market recovers. But they seem to have determined that. The risks associated with this credit card bet exceed the benefits. By preventing people from utilizing credit to purchase items. That would leave them with little cash on hand and bad credit, this safeguards the consumer as well.
The majority of investors who bought cryptocurrencies using credit cards. Were presumably interested in short-term profits and had no intention of staying long-term. They intended to enter and exit swiftly. So that they could pay off their credit cards. Before the exorbitant interest rate began to accrue. However, due to the cryptocurrency market's ongoing volatility. Many people who had purchased with this idea in mind. Found themselves losing a significant amount of assets as the market fell. They are now paying interest on lost funds, which is never a good thing. Naturally, this was terrible news for the banks. and as a result, credit card transactions for cryptocurrency have become more rare.
The takeaway from this is that you shouldn't use your whole credit limit. To invest in cryptocurrencies, you should only use a part of your hard assets to buy them. You should be able to put away this cash for the long term without it negatively impacting your budget.
Thus, avoid being caught investing funds in cryptocurrencies. That you may soon need only to discover that a downturn has drained your account of funds. Don't gamble with money you can't afford to lose, according to the proverb.". Is one that banks hope customers would keep in mind when they enter this new world of investing.
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