06 Feb Hidden Visa and Mastercard Fees on Crypto Purchases
The cryptocurrency market has been taking a beating today, and the reasons for this have begun piling up. Late last week, J.P. Morgan Chase (NYSE:JPM), Citigroup (NYSE:C), and Bank of America (NYSE:BAC) announced they would be banning the buying of cryptocurrency using their credit cards. However, there have been hidden Visa and Mastercard fees introduced, and cardholders are only found out through their bank statements last week!
It turns out that both card companies decided to reclassify the way that cryptocurrencies are processed on their networks. The fees came without any warning to cardholders.
Currently, in the U.S, the fastest way to purchase cryptocurrency is to use your debit/credit cards on certain exchanges. Linking your exchange to your actual bank account has lower fees, but transactions can take days to process. Thus, many U.S investors have opted to use their cards for purchases due to how quickly crypto prices fluctuate in the market.
Purchases from Coinbase, the largest cryptocurrency exchange in the U.S, are now labeled as a “cash advance” rather than just a regular purchase. Using a credit card to purchase cryptocurrency now results in a 5 percent fee from your credit card, on top of the 4 percent transaction fee with Coinbase, for most cards. The fee prices will fluctuate depending on the level of card you hold and the institution. These credit card middlemen have now determined that turning away millions of dollars in potential revenue, is now in their best interest. The question that remains – why?
Has there been an influx of unpaid debt? Have the banks decided to make the decisions for their customers who might not be very smart with money?
Have Visa and Mastercard finally woken up? Have they realized that digital currency completely removes the “middleman”, making them completely useless?
While these companies have begun trying to make it harder to purchase cryptocurrency, bank transfers remain the best option. Make sure to check your credit card statements, to access the possible fees that have been tacked on by your credit card company. I fear this is just only the beginning.
Featured Image: FinHow