Banks that have banned the purchase of cryptocurrencies using their credit cards are on the rise as Wells Fargo is now on board with such a ban. Chase, Bank of America, Citigroup and many other banks are also part of this new trend that is restricting crypto purchases.
It seems that debit cards can still 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 turn for the worse as these banks move toward this purchase ban. It probably won’t take long for the ban to become standard.
Apparently overnight purchases began to be canceled when credit cards were used to buy crypto, and those who had never had a problem buying a crypto with their credit card began to notice that they were no longer allowed to make these purchases. Instability in the cryptocurrency market is the culprit here, and banks do not want people to spend a lot of money which will become a struggle to recover if a major cryptocurrency recession occurs at the beginning of the year.
Of course, these banks will run out of money to earn when people buy cryptocurrencies and the market rises, but they have clearly decided that the worst is better than the best when it comes to gambling with their credit cards. It also protects consumers because it limits their ability to get into financial trouble by buying something that uses credit which can leave them cash and credit poor.
Most investors who used credit cards to make cryptocurrency purchases were probably looking for short-term gains and had no plans to stay for long. They expected to enter quickly and enter quickly, then pay off the credit cards before the high interest rate entered. But with the continued volatility of the cryptocurrency market, those who made the plan with this plan in mind saw themselves lose a lot. Assets with market downturn. Now they are paying interest on the lost money, and it is never good. This, of course, was bad news for banks and has created a current and growing trend of banning crypto purchases via credit cards.
The lesson here is that you should never maximize the credit line to invest in crypto and use one percent of your hard assets to make crypto purchases. These funds should be funds that you can lock up for a long time without compromising your budget.
So, don’t get caught up in throwing money in cryptocurrency which you will need very soon only a recession has taken money out of your pocket. There’s an old saying, “Don’t gamble with money that you can’t afford to lose” and this is a lesson that banks want people to learn as they enter this new investment frontier.