How to Buy Bitcoin With Credit Card – Learn 2 Trade Guide 2023

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Buying Bitcoin with a credit card from the comfort of your own home has never been easier. Not only is the internet jam-packed with online brokers that are regulated by key bodies like the FCA – but you can invest with a range of everyday payment methods.

As such, if you’re looking to buy Bitcoin with a credit card – you’re in luck. With that said, not all online brokers should be considered. For example, although they might hold the required license to accept credit card payments from UK residents, the underlying fees might make the purchase overly expensive.

Therefore, we would suggest reading our in-depth guide. Not only do we explain the easiest way to buy Bitcoin with a credit card, but we also show you the best online brokers to do this with.

Note: Although your chosen broker might not charge you a fee to buy Bitcoin with a credit card, the issuer might. If they do, this is likely because the credit card provider views the transaction as a cash advance. 

 

 

Fees to Buy Bitcoin With a Credit Card

On the one hand, you can buy with a credit card as it is super convenient. Moreover, you’ll also benefit from a seamless withdrawal process when it comes to cashing your Bitcoin out. However, there are a number of fees that you need to consider before taking the plunge. Not only does this include payment-specific fees, but trading fees, too.

As such, be sure to review the following before using a credit card to buy Bitcoin.

🥇 Deposit Fees

Some, but not all, Bitcoin brokers will charge you a deposit fee to use a credit card. If they do, this will come in the form of a variable fee. In other words, the more that you deposit, the more you should expect to pay.

One broker, in particular, that is well-known for charging high deposit fees is that of Coinbase. As noted above, the platform will charge you a whopping 3.99% to use a credit card when buying Bitcoin.

For example:

• Let’s say that you want to buy £2,000 worth of Bitcoin at Coinbase.
• You want to use your Visa credit card, so you need to pay 3,99%.
• This means that you will need to pay £79.80 in fees.
• As such, you will only receive £1,922 worth of Bitcoin even though your credit card was charged for £2,000.

Crucially, this is why we only recommend Bitcoin brokers that allow you to deposit funds for free. After all, you might also need to pay a fee via the spread or through a trading commission.

🥇 Cash Advance Fee

Depending on the credit card issuer, you might also be required to pay a ‘cash advance fee’. As the name suggests, this is a fee charged when you use your credit card to make an ATM withdrawal. While it is true that you are not making an ATM withdrawal, some credit card companies include other transaction types into the cash advance threshold.

Examples include online money transfers, gambling deposits, and online brokers. If this is the case, you should expect to pay in the region of 3% of the total transaction value. For example, a £2,000 Bitcoin purchase would cost you £60. Furthermore, unlike other products and services, a cash advance has the interest applied instantly.

Our advice would be to contact your credit card company beforehand, just to make sure the transaction will not incur a cash advance fee.

🥇 Trading Commission

On top of deposit fees and a cash advance, you also need to explore whether or not your chosen broker charges a trading commission. Once again using Coinbase as our primary example, the broker charges 1.5% every time you buy and sell Bitcoin. At a purchase of £2,000, this would amount to £30. This would then be subtracted from your purchase, leaving you with £1,970.

You would also be required to pay 1.5% when you get around to cashing in your Bitcoin investment. For example, if you sold the Bitcoin when your portfolio was worth £4,000, you would need to pay £60.

It is important to note that some online brokers actually allow you to buy and sell BItcoin on a commission-free basis. In fact, most of the brokers that we have recommended on this page just do that. As such, you stand to reduce your trading costs by some distance.

🥇 Spread

The final fee that you need to look out for is the spread. This is the difference between the ‘buy’ price of Bitcoin, with that of the ‘sell’ price. When you calculate the difference in percentage terms, this is the amount that you are indirectly paying to place your trade.

For example:

• The ‘real’ market price of Bitcoin is £10,000.
• The broker offers a ‘buy’ price of £9,900.
• The ‘sell’ price amounts to £10,100.
• The difference between the two prices against the market price is £100.
• This amounts to 1%, meaning that the spread is 1%.

So, if you were to buy Bitcoin, you would need to make at least 1% in gains just to break even. In other words, if you bought Bitcoin and then sold it immediately, you would do so at a loss of 1%. As such, the higher the spread, the more it indirectly costs you to trade.

This is why we only recommend brokers that offer super-tight spreads.

Withdrawing Your Bitcoin Investment

Although we have thus far focused our guide on the buying process, you also need to make some considerations about cashing your investment out. After all, we assume that you are buying Bitcoin because you think it will increase in value in the long-run.

The ease at which you can do this with your credit card will ultimately depend on the type of broker that you use, and how you intend on storing your coins. For example, if you use a regulated broker like eToro, there is no requirement to withdraw your investment out. This is because the platform has the required security controls to keep your funds safe.

At the other end of the spectrum, if you’re using an unregulated broker – which we would strongly advise against, you will be best to withdraw your coins out to a private wallet. Not only does this mean that you are 100% responsible for keeping your investment safe, but you’ll find that the withdrawal process is highly cumbersome.

For example, the end-to-end process involves:

• Buying Bitcoin with your credit card.
• Withdrawing the Bitcoin to a private wallet.
• Keeping your Bitcoin stored in the wallet until you are ready to sell.
• When you are ready to sell, you need to transfer the coins to an online broker.
• You then need to exchange Bitcoin for pounds.
• You then need to withdraw the coins to a bank account – as per anti-money laundering regulations.

This is in stark contrast to use a regulated broker like eToro. For example, once you have bought your Bitcoin, you can leave it at the broker until you are ready to sell. When you are, you can exchange it back to fiat currency at the click of a button.

Finally, you simply need to request a withdrawal back to the same credit card that you used to make a deposit. You can do this because you have already used the funding source at the broker, so everything is within the remi of UK anti-money laundering laws!

Choosing a Broker to Buy Bitcoin With a Credit Card

So now that we have covered important factors like deposits, withdrawals, and fees – we are now going to discuss the ins and outs of choosing a broker. After all, there are dozens of online Bitcoin brokers that accept credit cards, so knowing which platform to choose can be challenging.

As such, be sure to read through the following guidelines before signing up with a new platform.

Note: If you don’t have time to pick a broker yourself, we would suggest scrolling down to the bottom of this page. In doing so, you’ll find our top five rated Bitcoin brokers of 2023 – of which are regulated and accept credit cards. 

Nevertheless, we would suggest reviewing the following metrics prior to parting with your money.

✔️ Regulation

As we have noted throughout our guide thus far, you should only use an online broker that is regulated. This should include licensing bodies like the UK’s FCA, CySEC in Cyprus, and ASIC in Australia.

Alongside a number of other regulatory protections, this will ensure that your funds are held in segregated bank accounts. As such, if the worst happened and the broker went under, your investments should be safe.

✔️ Supported Credit Cards

You also need to validate that your chosen Bitcoin broker supports your specific card issuer. In most cases, brokers will have the capacity to accept Visa and MasterCard. Although much rarer, some will even offer support for AMEX. With that said, you are best advised to check this before opening an account.

✔️ Fees, Commissions, and Spreads

We have already covered fees in this guide, so you should know what to look out for. Nevertheless, this should start with the deposit process itself, as platforms like Coinbase will charge you 3.99% for the pleasure of using a credit card.

After that, explore whether or not the platform charges a commission on Bitcoin trades. Finally, be sure to check the competitiveness of the spread. Don’t forget, this is the difference between the buy and sell price of the asset.

✔️ Security

The most convenient way of storing your Bitcoin investment is to keep it at your chosen broker. However, you should explore what safeguards the platform implements first. If you’re purchasing Bitcoin in the traditional sense, make sure the broker keeps coins in cold-storage.

This means that the wallet is not connected to the internet. With that being said, if you decide to buy Bitcoin in the form of a CFD (Contract-for-Difference), you don’t need to worry about storage. This is because the underlying asset does not exist, as it’s merely a financial derivative you are investing in.

In terms of keeping your account safe, we prefer brokers that offer 2FA. This is where you are required to enter a unique PIN that is sent to your phone every time you wish to log in to your brokerage account.

✔️ Leverage and Short-Selling

If you are looking to buy and sell Bitcoin on a short-term basis, then you might want to consider a CFD broker. In doing so, you will be accustomed to a range of tools that would otherwise not be available at a traditional broker. For example, CFDs allow you to apply leverage when trading Bitcoin.

This means that you can buy more Bitcoin than you actually have in your account. If you’re from the UK (or European Union) then you will be capped to leverage of 2:1 when trading cryptocurrencies. Some platforms offer a workaround to this by offering leverage as a ‘multiplier’.

Nevertheless, CFD platforms also allow you to short-sell Bitcoin. This means that you are speculating on the future price of Bitcoin going down.

✔️ Customer Support

Finally, we would also suggest exploring the Bitcoin broker’s customer service department. This should include the types of support channels offered – such as live chat, telephone, or email. Similarly, you should also check to see what hours the support team works.

How to Buy Bitcoin With a Credit Card

If you’ve never purchased Bitcoin before and you want some guidance, follow the step-by-step walkthrough outlined below.

🥇 Step 1: Choose a Broker That Supports Credit Cards

First and foremost, you need to find an online platform that not only sells Bitcoin but allows you to buy it with a credit card. To do this, simply follow the guidelines that we discussed in the section above.

Alternatively, if don’t have time to research a platform and instead want to buy Bitcoin right now, scroll down and review the brokers listed at the bottom of this page. All of our top-rated brokers are regulated by bodies like the FCA and CySEC, they all support credit cards, and they all offer super-competitive fees.

🥇 Step 2: Open an Account and Upload Some ID

All regulated brokers will ask you to open an account before you can buy Bitcoin with a credit card. This literally takes a few minutes, and merely requires some basic personal information from you.

This includes:

• Full Name.
• Date of Birth.
• Home Address.
• Nationality.
• Contact Details.

Once you’ve opened your brokerage account, you will then need to verify your identity. You can normally do this by uploading a clear copy of your passport or driver’s license.

🥇 Step 3: Use Your Credit Card to Deposit Funds

Now that your brokerage account has been opened and verified, you can now deposit some funds with a credit card. Head over to the payments page, and select your respective card issuer (Visa, MasterCard, etc.).

Then, enter the following:

• Amount in GBP that you wish to deposit.
• 16-digit credit card number.
• 3-digit CVV number (back of card).
• Expiry date.

🥇 Step 4: Buy Bitcoin

In the vast majority of cases, credit card deposits are added to your brokerage account instantly. As such, you can proceed with your Bitcoin purchase.

In a similar nature to other commodities like gold, silver, oil, and natural gas – Bitcoin is priced against US dollars. As such, your broker might display your account balance in USD.

Once you are on the trading page for BTC/USD, look out for the order box. To complete your purchase, you will need to enter the following:

• Stake: This is the amount of Bitcoin that you wish to buy. As noted above, you’ll likely need to enter this in USD.
• Limit/Market Order: If you want to buy Bitcoin at the current market price, select a ‘market’ order. If you want to enter at a specific price, change this to a limit order. In doing so, your order will only be executed if and when the price is triggered.
• Leverage: Most online brokers give you the option of applying leverage. If they do, you’ll see it listed within the order box. This should be marked as a multiple, such as 2x.
• Stop-Loss Order: If you want to protect yourself from huge losses, you should install a stop-loss order. By specifying a price, your order will be closed automatically when the price is triggered.
• Take-Profit order: Finally, if you want to cash in your profits when Bitcoin increases by a certain amount, you can set this up via a take-profit order.

Once you have filled in the above metrics, complete your purchase by clicking on the ‘buy’ button.

Top Broker to Buy Bitcoin With a Credit Card

Ready to buy some Bitcoin with a credit card right now, but don’t have time to search for a broker yourself? If so, check out our top recommendations listed below.

Visit Avatrade now

Conclusion

In summary, buying Bitcoin with a credit card has never been easier. You simply need to find a suitable broker, open an account, enter your credit card details, and that’s it – you’ve just bought Bitcoin.  However, the tricky part of the process is knowing which broker to use, not least because there are dozens to choose from in 2023.

With that said, we hope that by reading our guide from start to finish, you now know the many metrics that you need to look out for. This should include deposit fees, commissions, spreads, customer support, and leverage.

Most importantly,  you need to ensure that your chosen broker is regulated by a body like the FCA. To help you along the way, we’ve listed our top five rated Bitcoin brokers currently in the market  – all of which accept credit card deposits and withdrawals.

 

 

FAQs

How do I buy Bitcoin with a credit card?

You will need to find an online broker that accepts credit card deposits. Once you do, simply open an account, verify your identity, and enter your credit card details. To complete the process, set up a 'buy' order.

What is the minimum deposit when using a credit card to buy Bitcoin?

Most online brokers will implement a minimum deposit amount when using a credit card, which typically sits within the £50-£150 range.

Why do I need to upload ID to buy Bitcoin with a credit card?

Online Bitcoin brokers accepting credit cards are required to verify the identity of each and every person that uses its site. This ensures that brokers comply with anti-money laundering regulations.

What deposit fees do I need to pay when using a credit card to buy Bitcoin?

Some, but not all, Bitcoin brokers charge a deposit fee when use a credit card. Expressed as a percentage, this is calculated against the size of your deposit.

Will my bank allow me to use my credit card to buy Bitcoin?

There were reports in early 2018 that a number of UK banks would no longer accept credit card deposits when buying Bitcoin online. However, you should have no problems if you are using a regulated broker, as the platform in question will likely offer thousands of other assets.

Can I withdraw back to my credit card?

Yes, once you have cashed your Bitcoin investment out at your chosen broker, you can withdraw your balance back to the same credit card that you used to make the deposit.

Can I short Bitcoin?

You can short-sell Bitcoin by using a regulated CFD broker..