The wave of banks banning the purchase of cryptocurrency using credit cards is growing as Wells Fargo joins these types of bans. Several other banks such as Chase, Bank of America, Citigroup and more are part of this new trend that is limiting the purchase of cryptos.
Debit cards can still apparently be used to buy crypto (check with your bank to confirm their policy), but using credit cards to buy crypto has taken a turn with these bans on purchases by these banks, and it probably won’t be long before this ban becomes standard. until
Apparently, overnight purchases began to be canceled when credit cards were used to buy crypto, and people who had never had a problem with credit cards before buying crypto began to notice that they were not allowed to make such purchases. Volatility in the cryptocurrency market is the culprit here, and banks don’t want people to spend a lot of money that will turn into a fight to get back if there is a big cryptocurrency drop like earlier this year.
Of course, these banks will also lose the money to be made when people buy cryptocurrency and the market is booming, but they seem to have decided that the bad outweighs the good when it comes to taking this gamble with their credit cards. This also protects the consumer by limiting their ability to get into financial trouble by using credit to buy something that could leave them with cash and poor credit.
Most investors who used credit cards to make cryptocurrency purchases were probably looking for short-term gains, and had no intention of staying long-term. They expected to get in and out quickly, then pay off their credit cards before the high interest started. But with the constant volatility of the cryptocurrency market, many who bought, considering this plan, lost a huge amount. assets with market decline. Now they are paying interest on their lost money, which is never a good thing. This, of course, was bad news for banks, and led to the current and growing trend of banning crypto purchases with credit cards.
The lesson here is that you should never have the highest 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 away for the long term without hurting your budget.
So don’t get caught out only to find that a downturn in the cryptocurrency you’ve been putting money into that you’ll soon need has taken 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 frontier of investing.