The wave of banks that have blocked cryptocurrency purchases using its credit cards is growing as Wells Fargo has embarked on this type of ban. Many other banks, such as Chase, Bank of America, Citigroup and more, are also part of this new trend that restricts the purchase of cryptos.
Debit cards, it seems, can be used to buy crypto (check with your bank to be sure of their policy), but the use of credit cards to buy crypto has taken a toll on these leading banks with this purchase ban, and it will probably take a long time before this ban becomes standard. .
Apparently overnight purchases began to be canceled when credit cards were used to buy crypto, and people who had never had a problem before buying crypto with their credit cards began to realize that they were no longer allowed to make this purchase. The instability in the cryptocurrency market is the cause of this, and banks do not want people to spend a lot of money which will be a struggle to pay off if a major decline in cryptocurrency occurs as it did at the beginning of the year.
Of course, these banks will also lose the money that will be made when people buy cryptocurrency and the market goes up, but they obviously decide that the bad is better than the good when it comes to gambling with their credit cards. This also protects the consumer as it reduces his ability to get into financial trouble by using credit to buy something that can leave them in cash and bad credit.
Most investors who used credit cards to make cryptocurrency purchases may have been looking for short-term benefits, and had no plans to stay long. They hoped to get in and out quickly, and then pay off their debts before the high interest rate began. But because of the ongoing instability in the cryptocurrency market many buyers, with this system, find themselves losing a significant amount of assets through the market collapse. Now they are paying interest on the lost money, and that is not good at all. This, in fact, has been bad news for banks, and has led to the current and increasing trend of banning crypto purchases with credit cards.
The lesson here is that you can never take out a credit line to invest in crypto, and only use a percentage of your hard-earned assets to buy crypto. These should be investments you can make for a long time without damaging your budget.
So, don’t get caught up in investing in the cryptocurrency you will soon need to find out that the depreciation has taken money out of your pocket. There is an old saying, “Don’t gamble with money you can’t afford to lose,” and that’s a lesson banks want people to learn as they try to enter this new investment threshold.