Debit cards are a practical and easy solution for any new Bitcoin investor looking to buy his first batch of cryptocurrency. Even if you’ve already had some experience buying with cash or funding your exchange account through a bank transfer, switching to a debit card can provide some benefits that other payment options just can’t, although not without any drawbacks.
As a payment option, debit cards can be used only in a cryptocurrency exchange online, for the most part. If you’ve never used a debit card in an online exchange before, it will be a good idea to understand how the process works, what its main pros and cons are, and what to look out for before buying. To help you with this, here’s an easy guide to buying Bitcoin with a debit card.
How to Buy Bitcoin with a Debit Card?
First of all, you will need to find an exchange that takes debit cards. Not all cryptocurrency exchanges may accept this payment method, even though most have already introduced debit and credit cards to make things easier for their users. If you’ve already found an exchange you’d like to use, getting from registration to a successful purchase is a simple process that involves some or all of the following steps:
- Register at a Bitcoin exchange.
- Verify your e-mail address or telephone number (depending on the exchange).
- Open a Bitcoin wallet with the exchange (if it has one) or find a different wallet you will use to store your Bitcoin keys. If you need help with this, you can use our page on Bitcoin Wallets.
- Go through the account verification process. If your exchange asks you to verify your account before making debit card payments, submit all the required documents and wait.
- After verifying your account, log into the exchange and visit the deposit/payment methods page.
- Choose debit card as your preferred option and enter all the requested card details.
- Choose how much you want to deposit and authorize the transaction.
- Set up additional security measures available at your exchange like 2FA (Two Factor Authentication).
- Place an order to buy Bitcoin (more information about this can be found on our Bitcoin Exchanges page).
- Enter your Bitcoin wallet address carefully and authorize the transaction.
- Transfer the Bitcoins to a more secure wallet if you feel the need to do so.
It’s important to understand that not all exchanges will be the same, so while one may ask you to verify your phone number another may never ask you to do so before you can deposit. In general, nearly every exchange will require you to verify your identity when using debit cards. Some may ask for IDs after you’ve made a deposit and there are also those that don’t ask for anything until you want to spend a lot.
Why Use Debit Cards to Deposit?
If you’re buying Bitcoin for the first time, you might be wondering as to why you should choose debit cards over other payment options. There is no real answer to this question as every buyer has different needs. But if you already have a debit card and don’t want to go through any hassle to find a different method, then it’s good to understand the pros and cons of using this common payment option.
Faster Than Bank Transfers
Bank transfers are one of the slowest options you can use to buy Bitcoin online, simply because bank transfers are subjected to additional verifications before being authorized. While this adds another layer of protection to the whole process, it also adds a delay which might end up costing you more with Bitcoin’s fast-changing price.
Bank transfers can also be a tad more difficult to use, especially if you do them through a local branch. Debit card transfers, on the other hand, will be as easy as shopping for anything online. If you use a debit card your money will clear fast and easy, giving you more time to focus on your investments rather than your money transfers.
Simpler Than Paying with Cash
If you want to buy Bitcoin with cash, your options will be to either use a Peer-to-Peer service to arrange an exchange with an interested seller or use ATMs and stores. In either case, it will take more time and effort to receive your Bitcoin than simply by paying with your debit card through an online Bitcoin exchange. And once you verify your account, you can enjoy this simplicity any time you want to buy.
More Expensive and Less Private
The biggest downside of using a debit card, or credit card for that matter, is that it can end up costing you more than a bank transfer, which often offers buying fees that are two or three times lower. Even if you buy higher amounts of cryptocurrencies you still might end up paying premium prices to do so on top of your trading fees when using a debit card.
Furthermore, the majority of Bitcoin exchanges also ask for verification documents before they allow you to use a debit/credit card. Verification is usually waived when you deposit with other cryptocurrencies but not when using any traditional payment methods. This can be a problem for many users who want to enjoy the same privacy as when buying with cash.
How to Find the Best Bitcoin Exchange?
Finding the right Bitcoin exchange is a subjective process that will depend on several factors. Apart from the obvious criteria of whether the exchange is open to your country, another thing you will have to consider when choosing is the fee structure. How high the trading fees are but also whether there are any additional fees for charge-backs or currency conversions are all things you have to ask yourself.
Apart from fees, you should also consider how liquid an exchange is, i.e. how many daily and monthly transactions it has. The more traders use the service, the better the prices will be and easier to buy and sell your Bitcoin. It’s also important to make sure the exchange has quality security in place and no history of fund thefts, as well as to see what other currencies or cryptocurrencies it deals with.