How to Buy Crypto With a Credit Card in the UK

Crypto.com was launched in 2016 as a one-stop shop for crypto aficionados. Its Earn program offers over 90 cryptocurrencies, a cashback Visa card you can use at selected stores, and high deposit interest rates. Large CRO (Crypto.com's cryptocurrency) holdings mean cheaper trading fees and more significant incentives, making the exchange appropriate for all-in players.

With a straightforward trading mechanism, intuitive interface, and comprehensive educational materials, the exchange also appeals to novice traders. Despite the simplicity, Crypto.com does not lack in-depth features, with advanced capabilities, including margin trading, advanced charting, and access to a decentralised wallet.

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	Uphold	8.4	Visituphold.com

Uphold offers 0% deposit, commission, and withdrawal fees for cryptocurrency, stocks, FX, commodities, and more – but compensates for this with in-built spreads of up to 1.8% for major coins. Combining multi-asset trading with transparent pricing, Uphold can be a great choice for all-round traders.

It’s worth noting that the exchange has received poor feedback from some users due to inaccessible customer service and occasional account closures. Considering the obvious risks, using Uphold for casual trading or exploring new opportunities rather than high-volume, active trading may make sense, as it lists some of the most rarely traded coins.

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	Coinbase	8.4	Visitcoinbase.com

Coinbase is perhaps the most recognisable brand in cryptocurrency trading, up there with Binance and Crypto.com. The platform offers a staggering selection of over 550 coins as of this writing, far-reaching educational materials and comprehensive news coverage, and two versions catering to both novice and seasoned traders.

If you ever used a regular online broker, you wouldn’t have any difficulty navigating through Coinbase’s standard exchange. It covers all the bases of buying, holding, and selling bitcoin. When ready, you can level up to the Advance Trade platform through which you can access TradingView-powered advanced charting, advanced order types, and other key functionalities like staking or borrowing.

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	Bitpanda	7.8	Visitbitpanda.com

Bitpanda is often revered for its incredibly easy-to-use platform, relatively low fees, and neatly organised educational materials. Combined, these make the exchange fairly suitable for beginner traders. Like Coinbase, Bitpanda offers an option to switch to its Bitpanda Pro platform, which offers more competitive pricing, API, advanced order types, and additional research and analysis tools.

The platform has a few drawbacks, most notably a lack of interest-earning options and only accepting payment method in euros (which means higher fees for credit card purchases). Yet, it has some unique features that appeal to certain types of users. The crypto index is the most outstanding and functions like an automated portfolio management system that invests in a predefined and diverse portfolio of leading coins by market cap and liquidity. The system adjusts weightings along the way, making it suitable for those seeking a hands-off experience.

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	Bitstamp	6.8	Visitbitstamp.net

Bitstamp features low trading fees, a cutting-edge platform (Tradeview), a highly-rated mobile app, and over 60 cryptocurrencies to trade. It benefits cryptocurrency investors seeking low fees and a staking programme (Bitstamp Earn) for Ethereum and Algorand rewards. Also, Bitstamp charges 0.50% for transactions of less than £10,000. It's a good choice as a user-friendly platform with low trading fees and a diverse selection of cryptocurrencies.

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	Kraken	7.6	Visitkraken.com

In terms of trading experience and functionalities, Kraken is geared towards more experienced traders rather than beginners, who are likely to be overwhelmed by the sheer number of moving parts. Seasoned traders though, would appreciate advanced charting, derivative products, multiple market orders, and the exchange’s standalone platform Cryptowatch, which includes live price charts, an integrated market feed, and trading alerts.

Beyond bells and whistles, one of the most outstanding qualities of Kraken is its commitment to client safety. The platform has never been hacked as of March 2023 and holds 95% of client assets in cold storage.

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	CoinJar	6.5	Visitcoinjar.com

Australia’s Coinjar offers an easy-to-use multi-asset trading platform featuring low fees and versatile payment options for UK traders. You can link your credit card to use the Instant Buy service offered by the exchange and enjoy faster payments, which sets you back 2% in depositing fees. Combined with spot trading fees that start from 0%, it’s not too shabby compared to industry standards.

The biggest drawback is that it features a limited choice of cryptocurrencies (just short of 70 as of this writing). Yet, its advanced trading platform Coinjar Exchange presents a highly customisable product complemented by real-time API access and multiple market orders.

With reasonable fees, versatile features, over 1,000 coins, and a questionable interface, Gate.io can be an excellent choice for certain traders. The platform is not easy to navigate and does go through occasional downtimes. Nevertheless, you will likely find more investment opportunities here than on most other exchanges. Seasoned traders will also appreciate the advanced features like options and futures trading, strategy bots, or leveraged tokens.

While beginners may find the trading experience challenging, they can set things on autopilot by opting for the copy trader functionality. Other than on eToro, this is not complemented with robust social trading features. Still, it may be more interesting to copy and learn from experienced traders on a platform with comparatively advanced tools and investment opportunities.

Your bank or building society might classify cryptocurrency purchases with a credit card as a cash advance (cash withdrawals from credit cards, usually through an ATM). This is because when you use a credit card, you are technically borrowing money and not spending the money you have. When you purchase something like a cryptocurrency that can be easily converted into cash, you effectively get a cash advance.

This brings about several setbacks:

• Cash Advance Fee: This is a one-time charge made when you accept your advance; it ranges from 3% to 5% of the sum.

• Higher Interest Rate: Credit card Issuers often impose higher interest rates for cash advance payments than regular purchases.

• No Grace Period: Credit cards usually give you 21 days to pay off crypto purchases before charging interest, but cash advances accrue interest immediately.

• Lower Credit Limit: Cash advances often have a lower credit limit than the total limit available for other payments. This means you will likely have fewer funds available for cryptocurrency purchases.

• No Credit Card Rewards: Your expenditure is probably not eligible for rewards like cash back, travel points, or miles if your credit card company treats a cryptocurrency purchase as equivalent to cash. Similarly, it won't count against the amount you must spend to receive a sign-up bonus.

To avoid a cash advance, you should check with your credit company prior to your purchase.

You assume a high level of risk to incur debt if you use a credit card to purchase cryptocurrencies if they are considered cash advance payments by your bank, yet other elements make it attractive. Let’s dive into the benefits and risks a bit further.

Speed

Often, the biggest attraction to credit card purchases is that they are almost instantaneous – which serves excellence for active traders who wish to rapidly buy into the drop in a bear market. Funding your purchase through a bank transfer, on the other hand, tends to take between three to five days. You do not actually own the coins until the transaction is finalised.

So yes, buying cryptocurrencies with a credit card is often the fastest way to do so. But so is using a debit card, and they only come with additional processing fees and not higher interest rates. Considering the lack of grace period credit cards are often touted for, it may be wiser to use a debit card instead of a credit card when seeking speed in your transactions.

Safety

Buying cryptocurrency with a credit card is a very risky financial undertaking. But practically, it’s a fairly safe method against fraudulent acts, especially if you are using unvetted exchanges or providers that you are not entirely sure of (which is not advised under any circumstances).

This is because credit (and sometimes debit) card payments can be reversed, whereas bank transfers are a done deal once they reach their destination. When you make an online purchase above £100, your payment is automatically protected under Section 75 of the Consumer Credit Act. The legislation dictates that if the company goes under or has defrauded you by misrepresenting their services, they are to be on the hook for your losses.

Costs

As we mentioned before, buying cryptocurrency with a credit card accrues additional costs.

Let’s say you make a purchase of £1000:

• Additional processing fees tend to average at 2%, so that’s £20.

• Cash advance fees, if applicable, hover around 3% to 5%, let’s settle on 4%. In that case, you will be paying £40.

• Cash advance payments accrue interest charges straight after the payment. Let's assume you take three months to pay off the £1000 balance, and that the interest rate is 25% APR (or 2.08% per month). In this case, you'll pay about £52 in interest charges.

So you are looking at a total of £112 on top of trading costs and the price of your £1000 purchase. These charges are for illustrative purposes only and can vary widely depending on your card issuer and preferred cryptocurrency exchange. Percentage charges as such create a potentially significant problem, especially for high-volume trading.

No, buying cryptocurrencies with a credit card is not anonymous. Exchanges that accept credit cards are centralised and usually require KYC registration as they accept fiat currency (like the British Pound Sterling) payments. This is because fiat currencies are regulated by their respective governments. Your credit card itself also carries personally identifiable information like your address. Yet, there are other ways to buy cryptocurrencies anonymously and indirectly through your credit card, as well as a handful of exchanges that don’t require KYC registration for smaller purchases.

Buying cryptocurrencies with a credit card without Identity verification or KYC:

Decentralised exchanges do not accept fiat currencies, meaning that you can’t use your pounds to buy coins, but they are anonymous. To use a DEX, you must link a crypto wallet to the platform, which you can top up by using a centralised exchange.

The most notable DEX includes dYdX; you can set up a MetaMask wallet (the most popular wallet used in the platform), and fund your wallet through your preferred crypto trading platform. Coinbase, for example, allows you to fund your MetaMask wallet either through your payment methods (which will include your credit card) or your crypto balance.

Buying cryptocurrencies with a credit card without registration:

As we said before, some exchanges like Changelly don’t require KYC registration for every transaction. This primarily depends on the size of the purchase, as larger amounts are more likely to be subjected to KYC and AML (anti-money laundering) policies.