How to Buy Ethereum with Credit Cards and Debit Cards
There are many reasons why you may be interested in buying Ethereum. You could be interested in diversifying an existing cryptocurrency portfolio. You could be interested in accumulating Ethereum in order to engage in commercial transactions for goods and services with the ever-increasing number of companies that are accepting it. You may be interested in using Ethereum as a long-term investment or for short-term speculative trading.
Whatever your personal reason happens to be, the fact that you can purchase Ethereum using a credit card or debit card makes the process of accumulating it simple. Of course, no matter how simple a process might be, if you’ve never done it before you are going to have some questions. This guide will provide you with the basic set of knowledge that you need to make your acquisition of Ethereum using your credit card or debit card easy and painless.
1. Some Background on Ethereum
One of the most important things that you need to know about Ethereum has to do with how the term “Ethereum” is used. Ethereum formally refers to the Ethereum blockchain. This is the digitally-based ledger and platform that exists in a decentralized fashion and that allows for the authentication of transactions and contracts while also serving as an ecosystem for apps and a wide variety of other uses.
The cryptocurrency that exists within the Ethereum blockchain is known as “Ether.” While you may encounter the word “Ethereum” being used to refer to the cryptocurrency, just be advised that the appropriate term is Ether. Within this guide, we will be referring to the cryptocurrency by its correct name, Ether.
2. Basic Considerations Before Buying Ether
Before you actually start buying Ether with your credit card or debit card, there are a few you things that you should know.
Need for an Ether Wallet
Regardless of the platform that you choose to purchase your Ether, you will encounter a fundamental prerequisite. This being having an Ether wallet.
An Ether wallet is not where your Ether is stored. It refers to a set of keys, one private and one public, that allows you to send and receive Ether.
When you purchase Ether you will need to instruct the seller where to send it to you. This is done by giving them the public key of your Ether wallet. Establishing an Ether wallet is a very simple process. You may consult some of our guides and articles that we have on the subject.
You should also be aware that some of the platforms used for purchasing Ether will offer you the option of creating your Ether wallet on their system. While this is generally a safe option, we would advise you to create your own wallet in order to maximize the mitigation of security risks and exposure.
Fees
Whenever you purchase Ether you will encounter individual or multiple fees. These can originate from the platform that you are using to make the purchase as well as from your own banking institution.
When using a credit card or debit card, make certain to thoroughly analyze the fee structure that is involved. If you rely solely on a cursory review, you may be negatively surprised by discovering that you were charged for additional fees.
Privacy and Anonymity
One thing which many people take as a given when engaging with anything related to cryptocurrency is that it is private and anonymous. While the decentralized nature of the Ethereum blockchain makes it extremely attractive for those who value security and privacy, you must be aware that when you purchase Ether using your credit or debit card, you are adding other factors to the equation. These are not protected by the guise usually provided by the Ethereum blockchain.
In other words, the fact that you’re using a credit or debit card that was issued by your bank will leave a trail indicating that you interacted with a platform or marketplace which principal business involves transacting cryptocurrency such as Ether. Even though what you do with your Ether afterward would be pseudonymized by the blockchain, the initial acquisition of it when purchased with a credit or debit card might be difficult to obscure.
Of course, with the exception of a very limited number of countries, it is not illegal for you to purchase cryptocurrency. Therefore, complete anonymity may not be something you are seeking. However, if you were interested in absolute secrecy, you should be aware that the credit and debit card component would make that difficult if not impossible.
3. Knowing Your Options
In order to purchase Ether, you will need to use the services of a cryptocurrency exchange. These types of platforms will sell you Ether and process your credit card for payment. Some will only offer exchange services, others will offer a whole suite of services. They may offer trading platforms for those who wish to engage in speculative or long-term investment with Ether.
4. CoinMama
CoinMama is a cryptocurrency exchange that has been in continuous operation since 2013. It operates in over 180 countries and allows you to purchase both Ether and Bitcoin with any Visa or Mastercard branded credit or debit card.
In order to use CoinMama, you must first register on the platform. You must then submit information used by CoinMama to validate your account. This can include images of your identification, proof of address, and the credit card used for payment. While you may choose not to send this type of personal information, that would result in CoinMama lowering the amount of Ether that you can purchase on a monthly basis from the platform.
In terms of ease and security, CoinMama is well-suited to those individuals new to Ether.
Visit CoinMama Now5. Changelly
Changelly is another cryptocurrency exchange that allows you to use your Visa or MasterCard to purchase Ether. They offer buyers a fluctuating rate of exchange that reflects the changes in the Ether market down to the second. Their fee is 0.5 percent.
Buyers have a choice of denominating their purchase of Ether in either U.S. Dollars or Euro. This means if you are using a credit or debit card that is not denominated in those fiat currencies, your banking institution may assess additional fees related to foreign currency exchange.
Changelly also offers the users of their platform the option to use two-factor authentication to access their account. To use this feature you will need a second device, such as your cell phone, with the Google Authenticator app installed. You are given the option to have two-factor authentication turned off, however, we would advise that you keep it activated.
Visit Changelly Now6. CEX.io
CEX is yet another platform that will accept Visa and MasterCard for the purposes of purchasing Ether. They allow their users to choose between U.S. Dollars, Euros, or British Pounds for the purposes of denominating their purchase. CEX has a fast processing time for all transactions. Once your credit or debit card payment is processed, you will normally see your Ether reflected in your wallet within 30 minutes.
Additionally, for those who wish to engage in speculative trading of Ether, CEX offers trading accounts with margin. Users can leverage their accounts as high as 3 to 1.
Visit CEX.IO Now7. Odds and Ends
The established cryptocurrency exchanges that accept credit and debit cards for purchasing Ether tend to exclude American Express.
The use of “reloadable” Visa or Mastercard debit cards — those which you can purchase and fund anonymously — is a hit or miss affair. While popular among those who want to add a layer of anonymity to the purchasing process, the way that reloadable debit cards are issued means that not all will work on all exchanges.
For those of you who may be familiar with the concept of peer-to-peer cryptocurrency marketplaces — such as those popular for finding individual sellers of Bitcoin — there isn’t an equivalent for Ether that allows credit cards as a form of payment. There is a peer-to-peer marketplace dedicated to Ether known as LocalEthereum. However, you cannot use your credit or debit card on that platform.
8. Conclusion
Purchasing Ether with your credit or debit card brings with it speed, ease, and security. Some individuals may voice their disapproval of using credit and debit cards for this purpose in that they often result in slightly higher fees. However, if you are just getting started with the purchasing of Ether — especially if the amounts are modest — the impact of such additional fees compared to other methods of payment is negligible. The convenience offered by using credit and debit cards would outweigh the slightly higher fees.