Credit Card Companies Just Made Buying Crypto SLOWER, HARDER, and MORE EXPENSIVE

Using credit cards to buy cryptocurrency on Coinbase - and on any other exchange — will now cost at least 10% more in fees plus interest.

Both Mastercard and Visa have decided in the past week to change the way cryptocurrency purchases are processed. Now, expect to pay a 5% fee to your credit card merchant as well as the 4% service fee to the exchange. These transactions will be deemed “cash advances”, which bring various other fees along for the ride. And interest charges will start to accrue once the purchase goes through.

How many cryptocurrency investors are willing to take a 10% hit on the initial investment? Hummm, well, might depend on how hot the crypto markets get in 2018. Even so, these fees will certainly make you want to get in at a better price.

The bottomline is that credit card companies are making it more expensive to invest in cryptocurrency. Obviously, the new forms of payment are threatening their business models. It seems that the credit card issuers will attempt to deter would-be investors from taking the leap. How long this strategy is in play will be interesting to see.

Personally, such a strategy is likely to fuel more animus toward the credit card companies, and in particular the associated fees. Perhaps in the future a better balance will be struck between credit card companies and their customers.