If you’re wondering how to buy stablecoins like USD Coin (USDC) and Tether USD (USDT) with your credit card then you’re in the right place. We’re going to show you the best and easiest ways to buy stablecoins with a credit card, and then break down the pros and cons of doing so. Then, we’ll show you the basic steps for making your purchase.
Buying stablecoins like USDC or USDT with a credit card can be extremely easy, but there are some drawbacks as well. Whether buying stablecoins through a crypto exchange, a payment/wallet platform, or a dedicated on-ramp, there are many ways to use your credit card to buy USDC and USDT. Let’s jump in.
Best Ways to Buy USDC or USDT with a Credit Card
Crypto Exchanges
Cryptocurrency exchanges are one of the easiest ways to buy stablecoins like USDC or USDT with a credit card. This is especially true if you’ve previously signed up for a crypto exchange. If you’re not already signed up for one, it may be easier for you to use one of the other options we give you.
Regardless, crypto exchanges will allow you to buy USDT or USDC with a credit card and then the stablecoins will be deposited into your trading account where you can trade them for what you want or keep them until you see a good buying opportunity..
PayPal
PayPal has become more involved in the cryptocurrency sector, evidenced by the release of their own USD stablecoin PayPal USD (PYUSD). Unfortunately, PayPal doesn’t allow you to buy stablecoins other than PYUSD, but if you’re just looking to buy a USD stablecoin with your credit card, then PayPal is a good option.
Fiat On-Ramps (MoonPay, BitPay, etc.)
There are a lot of payment gateways/providers that let you buy USDC or USDT with a credit card and then send the stablecoins to the wallet address of your choice. Often when you’re buying digital assets with a credit card through a crypto exchange, they’re actually redirecting you to a payment gateway such as MoonPay, or BitPay, who are the ones who actually process your credit card purchase.
Peer-to-Peer Exchanges (Paxful)
Peer-to-peer (P2P) exchanges are another way for you to buy USDT or USDC with a credit card. With P2P exchanges like Paxful, it is a marketplace where people post what they have for sale, at what rate, and how they’re willing to accept payment. Many sellers on P2P exchanges like Paxful accept credit cards, in addition to things like Cash App and other payment options.
Pros of Buying Stablecoins with a Credit Card
Instant Purchase
The biggest advantage to buying USDT or USDC with a credit card is that it’s essentially instant. Instead of having to transfer fiat to a platform in order to exchange it for stablecoins, you can just buy them instantly using your credit card. Then they are available nearly instantly for you to do swaps or hold.
Rewards
Rewards for your purchases will depend on the credit card you are using. Crypto and traditional credit cards tend to give you cashback for purchases.
But, whether those cashback rewards are worthwhile will depend on the difference between the fees you’re paying for using a credit card, and the rewards you get.
It won’t be worth getting 2% cashback on your USDT purchase if the fee for the purchase was 3%. See the cons section below for more details.
Cons of Buying Stablecoins with a Credit Card
Fees
Though the instantaneousness of buying USDT or USDC with a credit card is quite convenient, the fees those purchases will incur are not. You’ll likely pay fees in excess of 3% for making a credit card purchase of either USDC or USDT. Not to mention the possible cash advance fees and other fees the credit card company could charge for the transaction.
If you want to maximize the amount of USDC or USDT you get for your money, then you should use a method other than your credit card. It will be a slower process where you have to transfer fiat or other crypto to an exchange first, but it will save you a ton on fees. Consider the fact that trading fees for crypto exchanges such as Binance are 0.1% of the transaction, compared to the 3%+ you’ll pay for using a credit card.
Bank Restrictions
The lack of consistent regulation surrounding most digital assets including stablecoins has made banking companies wary of purchases made using a credit card they issue. Sometimes buyers try to file chargebacks when cryptocurrencies they purchased drop in price, which is something credit card companies would rather not deal with.
There is a good chance that your bank has blocked crypto purchases using their credit cards, and if so, you’ll need to find an alternative method. You may be able to make a crypto purchase the first time you attempt one, but not on subsequent attempts as the bank will note what the first purchase was for and block future ones.
Basic Steps for Buying USDC or USDT with a Credit Card
Step 1: Choose a Platform
Before you can buy USDT or USDC with your credit card you’ll need to decide where you’re going to do so. The two most important things to look for when choosing the platform to make the purchase are the fees for credit card USDC or USDT purchases and that it is available in your jurisdiction.
Step 2: Register and Complete Identity Verification
After you’ve chosen a platform that fits your needs, you can register for it. This won’t take very long, likely just requiring you to verify your email or phone number. But in order to buy stablecoins like USDT or USDC with a credit card you’ll have to complete identity verification.
Even if it’s a crypto exchange that doesn’t require identity verification during initial sign up, when you go to buy a crypto asset with a credit card, you will then be required to complete identity verification.
Identity verification or Know Your Customer (KYC) processes helps deter money laundering and terrorist funding through cryptocurrencies. You will have to verify your identity by providing information such as:
- Your residential address
- Proof of residence (government issued ID such as a passport or driver’s license)
- Utility bill with address that matches address your provided
- A selfie, possibly holding a piece of paper with a code or the website written on it, along with the date
After you enter all of these personal details, your identity should be verified within 24 hours, if not much sooner.
Step 3: Add Credit Card and Purchase USDC or USDT
After you’ve registered and successfully completed your identity verification, you can purchase USDC or USDT using your credit card. This is generally done through a “Buy Crypto” type button on a crypto exchange.
You’ll then need to enter what fiat currency you want to use to make the purchase, and the amount of USDC or USDT you want to buy. Some platforms will allow you to set up a recurring buy. This means that you can set it up so that you buy X amount of USDC or USDT every day, week, month, etc.
Final Thoughts
Buying stablecoins with a credit card can be extremely convenient, but it’s also likely the most expensive way to do so. Unless you desperately need USDC or USDT instantly, you’re better off using a slower method that incurs less fees. The same is true for buying any other digital asset using your credit card.
