How to Buy Litecoin with Credit cards and Debit Cards
If you are interested in purchasing Litecoin, especially when it involves using your credit card or debit card, there are a few things that you should be aware of to make the process as smooth and expeditious as possible. Even if you have experience purchasing other types of cryptocurrency, such as Bitcoin, it would be beneficial to instruct yourself on some of the key differences.
This guide will focus on the basic steps and background information that you should be aware of regarding the purchase of Litecoin with credit cards and debit cards.
1. The Basics About Litecoin
Litecoin, like Bitcoin, is a cryptocurrency. In many ways, it shares technical details with Bitcoin. They both rely on a decentralized encrypted blockchain network to store a ledger of all transactions conducted with their respective currencies. Both of their blockchains function in a decentralized and polyonymous fashion.
Some of the key differences that make Litecoin attractive to an ever-increasing number of people is the fact that Litecoin “blocks” are hashed approximately every two and a half minutes. This is four to six times faster than Bitcoin. Also, the maximum number of Litecoin that are to be produced in total is nearly double that of Bitcoin. Additionally, for those keen on the cryptography behind cryptocurrency, Litecoin does not rely on the SHA-256 protocol. Instead, it uses Scrypt. Many security professionals believe that Scrypt is a stronger and more protective encryption algorithm.
In laymen terms, Litecoin can offer faster transaction times while potentially being better protected and resilient.
2. First Step in Purchasing Litecoin
No matter what method of payment you use to purchase your Litecoin, one thing that you will always need is a Litecoin wallet. This wallet is what permits you to send and receive Litecoin. It is not where your Litecoin is stored, rather it consists of two alphanumeric keys, one public and one private, that allow your Litecoin to flow in and out of the Litecoin blockchain. You can view the public key of your wallet as a pre-filled deposit slip that you give to other parties so you can receive Litecoin. You can view your private key as a signed check authorizing other parties to take Litecoin from you.
Obviously, when dealing with the purchasing of Litecoin you will normally be dealing with your public key. In other words, the key that allows you to receive Litecoin.
There are hardware-based, software-based, online and paper-based wallets that you can choose from. Each of these types of Litecoin wallets has its pros and cons. More information regarding the different types of crypto wallets can be found in our guides and articles dealing on the subject.
Specific to Litecoin, Litevault.net is a good example of an online wallet. Cryptonator is another good example of an online wallet. An advantage obtained form Cryptonator is that it accepts 18 other cryptocurrencies in addition to Litecoin. Not only does this make it convenient if you are dealing with multiple cryptos, but it also allows you to exchange between different cryptocurrencies at competitive exchange rates free of additional fees.
For those wanting the added security that comes from paper-based wallets, sites like BitcoinPaperWallet.com offer a portal along with detailed instructions on how to print a Litecoin paper wallet securely. Liteaddress.org is a more direct option for those wanting a paper wallet quickly.
The TREZOR and Ledger Nano S are good examples of hardware-based wallets that can accommodate Litecoin.
3. What to Know About Fees
When buying Litecoin with a credit card or debit card, you need to be aware of all of the possible fees that you may encounter. The amount and number of the fees are determined by the method that you choose in purchasing your Litecoin.
For example, some cryptocurrency exchanges (the platforms used by the public to purchase Litecoin) may charge a service fee in addition to other processing fees for credit card and debit card purchases. Other cryptocurrency exchanges may only charge a credit card processing fee and no additional fees at all. Those types of exchanges, however, may not offer as competitive as an exchange rate as other exchanges mainly due to the fact that they are making their money on the spread — the difference between the buy and sell price of your Litecoin purchase.
Credit card processing fees, sales transaction fees, and exchange fees should always be disclosed to you before you authorize a trade. If you stumble upon a cryptocurrency exchange that does not offer transparency in its fee schedule, it should be avoided.
Also, it is important to note that the size of your transaction could affect the amount that you pay in fees.
4. Direct Method of Purchasing Litecoin
The direct method of purchasing Litecoin with credit cards and debit cards refers to using a cryptocurrency exchange that will process the payment for Litecoin in a predetermined fiat currency and charge it to your card. U.S. Dollars and Euros are the most commonly used fiat currencies for this purpose. Some exchanges will give you the option of choosing the fiat currency that you want to use for your Litecoin purchase. We suggest that you choose the fiat currency that is native to your credit or debit card. Otherwise, you may be assessed foreign currency exchange fees from your banking institution. Also, the currency exchange rates offered by banks are often not the best, costing you additional money on that front.
When you purchase Litecoin using the direct method, once your payment clears, your Litecoin will be reflected in your Litecoin wallet.
5. Exchanging Other Cryptocurrency for Litecoin Method
Another way to acquire Litecoin is to purchase another cryptocurrency, such as Bitcoin, and then exchange that for Litecoin via an online wallet solution. This is when online wallets, such as Cryptonator mentioned earlier, or other options, such as Coinomi, can come in handy.
Clearly, this method adds a few more steps to the process. You may ask yourself why you would go through the added headache? Normally, especially if you are new to cryptocurrency, it would be easier to use the direct method. However, there may be moments — either due to advantageous exchange rates, ease of use of a particular platform, limitations imposed by platforms or individual banks, etc. — when you might want to purchase Bitcoin with your credit card or debit card and then use that to exchange for Litecoin.
Again, it is not the most recommended method, but you should be aware that it is possible if the need ever arises for you.
6. Changelly
Changelly is a cryptocurrency exchange that allows you to use your Visa or Mastercard branded debit card or credit card to purchase Litecoin. The user interface found on Changelly is one of the most user-friendly on the market. It does not confuse those who are new to cryptocurrency by offering complicated charting packages that are more appropriate for traders and speculators. Changelly is geared entirely toward the novice or retail-level user.
When you add the fact that it has a low 0.5 percent base transaction fee, Changelly becomes one of the best choices if your main goal is to acquire Litecoin to hold or to use for commercial transactions.
Visit Changelly Now7. BitPanda
If you reside in the EU, BitPanda is an exchange that allows you to use your Visa and MasterCard branded cards for purchasing Litecoin among other cryptocurrencies. The platform has one of the fastest processing times being measured in the majority of cases in seconds, not minutes. Having strong security policies in place, MasterCard-branded cards must include the “3D Secure” feature and Visa-branded cards must be part of the “Verified by Visa” program in order to be allowed for the purchase of Litecoin.
Due to the fact that BitPanda is a European solution, the base currency for the purchase of Litecoin is denominated in Euros.
8. Coinbase
Coinbase is one of the most well-known cryptocurrency exchanges. It, however, has the drawback that it is only available in 32 countries worldwide. Coinbase does allow you to use your credit card or debit card to purchase Litecoin directly on their platform. This requires you to register for an account on Coinbase. This will also require you to submit verification documentation regarding your identity and physical address.
Coinbase offers you the option to open your own wallet on its platform. If you already have your own Litecoin wallet, you could have your Litecoin sent to your own wallet address instead.
Visit CoinBase Now9. Potential Restrictions Imposed by Your Banking Institution
You should be aware that there are some banking institutions that prohibit the use of their credit or debit cards for the direct purchase of cryptocurrencies such as Litecoin. This could result in a cryptocurrency exchange platform declining your transaction even if everything else is in order.
Using prepaid debit cards can be a workaround to this type of problem. However, the use of prepaid debit cards for this purpose is not always a guaranteed solution. In the end, the banking institution that is backing the prepaid debit card is the final determining factor. Also, depending on your country of residence, using prepaid debit cards in this manner might be prohibited or restricted.
10. Conclusion
Purchasing Litecoin with credit cards and debit cards is fast and convenient. However, there are also other payment methods — such as cash, bank transfers, and third-party payment processors such as PayPal — that can be used. If you find that buying Litecoin with credit or debit cards is not practical for you, our guides on purchasing Litecoin with alternative methods of payments will provide you with the information that you need.