Why have banks banned cryptocurrency purchases using their credit cards?

The wave of banks banning cryptocurrency purchases on their credit cards is growing, with Wells Fargo now enforcing these types of bans. A number of other banks such as Chase, Bank of America, Citigroup, etc. are also part of this new trend that limits the purchase of cryptos.

Debit cards can still apparently be used to buy crypto (check with your bank to be sure of their policies), but using credit cards to buy crypto has taken a turn for the worse with these banks leading the way with these purchase bans. and it probably won’t be long before this ban becomes standard.

It seemed like overnight purchases started to get canceled when credit cards were used to buy crypto, and people who had never had any trouble before buying crypto with their credit cards started noticing that they were no longer allowed to make those purchases. Volatility in the cryptocurrency market is to blame here, and banks don’t want people to spend large amounts of money that will be a struggle to get back if a major cryptocurrency crash occurs, as it did earlier in the year.

Of course, these banks will also miss out on the money to be made when people buy cryptocurrencies and the market booms, but they seem to have decided that the bad outweighs the good when it comes to their credit card game : This also protects the consumer because it limits their ability to get into financial trouble by using a loan to buy something that could strain cash and credit.

Most investors who used credit cards to make cryptocurrency purchases were probably looking for short-term gains and didn’t plan on sticking around for the long haul. They hoped to get in and out quickly and then pay off the credit cards before the high interest rate. assets as the market declines. Now they are paying interest on the money they lost and that is never good. This, of course, was bad news for banks and led to the current and growing trend of banning crypto purchases with credit cards.

The lesson here is that you should never max out a line of credit to invest in crypto, and only use a percentage of your assets to make crypto purchases. These funds should be funds that you can hold onto for a long time without hurting your budget.

So don’t get caught putting money into cryptocurrency that you’ll soon need only to find out that the crash has taken money out of your pocket. There is an old saying that says: “Don’t gamble with money you can’t afford to lose,” and that’s the lesson banks want people to learn as they enter this new investment frontier.