Coinbase, one of the leading cryptocurrency platforms, 1 Feb warned some of its customers that credit card issuers now charge a Commission when you buy cryptocurrency. Exchange notify customers by email, informing them that the company issuing and servicing credit cards, now considering the purchase of cryptocurrency as cash advances, which entails a fee and a higher interest rate for the transaction.
According to Investopedia, Coinbase does not mention any particular company and refused to comment further on this issue. The Mastercard representative made the following statement:
«In the last few weeks we have clarified transactional and commercial category for this type of transaction (purchases of cryptocurrencies). This ensures an appropriate attitude to such purchases, both sellers and issuers of the cards».
Visa prefers to distance themselves from the problem. A company representative said the following:
«Each Issuer financial institution that issued the card can set any Commission on certain types of purchases, so Visa has nothing to do with it. We do not manufacture cards.»
A Reddit user claiming to work with one of the largest companies, credit card stated that at the end of January customers of Visa and Mastercard were becoming the victims of these adverse changes:
«Operations at Coinbase were equal Visa and Mastercard for cash advances. This affects the United States and Canada (although from what I understand, it can refer to any transaction for Visa and Mastercard). Please note that when you purchase cryptocurrency debit card, you may face a fee to the Bank».
In a letter to its users, the representatives of Coinbase wrote:
«Recently changed the classification code for cryptocurrency purchases with most major credit cards. The new code allows banks and card issuers to charge buyers an additional fee. This fee is not an initiative Coinbase».
It is reported that one Issuer takes an additional $ 10 or 5% transaction fee, and the annual interest rate is 26.24% instead of the normal 16 to 25% for such purchases using credit. Experts say that credit card issuers have taken these steps to mitigate the effect of a possible drop in prices of bitcoin and other cryptocurrencies, which could affect them and cause a wave of defaults. On the other hand, there is a likelihood that issuers have simply decided to cash in on the cryptocurrency boom.
In the interests of cryptocurrency investors to avoid direct pokupki cryptocurrency credit cards and other payment methods. The taxation of income from cryptocurrency is already sufficient burden, and it makes no sense to add more.
Banks prohibit the purchase of crypto-currencies in the loan
For customers of the largest U.S. banks JP Morgan Chase, Bank of America and Citigroup the purchase of cryptocurrencies through credit cards can already be considered closed, and in a literal sense. According to an article in Bloomberg, in early February, all the banks imposed a ban on transaction with personal and corporate credit cards with well-known cryptocurrency exchanges and exchangers. Bank of America also explained that we are talking only about transactions using credit cards, debit cards will continue to function normally.
Banks explain this policy that in the event of further decline in rates of cryptocurrencies their clients will suffer losses, which increases risks of loan default. In addition, the fraudsters who have stolen credit card can buy bitcoin on the entire credit limit and withdraw it, leaving the card holder is not only without funds, but with a huge debt, it is almost with zero chance of a refund.