How To Buy Bitcoin & Get Crypto With Credit Card, Bank Or PayPal?

Bitcoin has certainly made a huge impact on the financial world. It is one of the most revolutionary currencies out there, but at the same time it is sort of young.

The creator of Bitcoin first launched his brilliant cryptocurrency in 2009, and it has been making huge breakthroughs in both the financial and online worlds. However, eight years is an extremely low amount of time when talking about the maturity of a currency.

Because bitcoin is so young, it isn’t stable and goes through periods of volatility frequently. While this is fantastic news for those of us who are looking to trade it daily, it might not be such good news for long term investors.

Besides its volatility and the fact that it’s a non-fiat currency, trading bitcoin can be somewhat of a hassle. In fact, even buying bitcoin can be slightly confusing for those who aren’t accustomed to cryptocurrencies or who haven’t been paying attention to how the currency operates and how it can be purchased.

Generally, with any other currency all you need to exchange or trade it is a link to your active bank account or an account which is specifically designed for trading. Bitcoin can be acquired in a similar way, but the steps you need to take to successfully purchase the currency are a bit more intricate.

Luckily, we can guide you through all the steps you need to take to ensure that you are able to purchase bitcoin safely and effectively. There are a few topics that we need to discuss, so let us dive into it step by step.

How To Buy Bitcoin Introduction

So what are fundamentals of purchasing bitcoin? The steps are pretty simple:

1. Find an exchange that sells bitcoin for your currency of choice.
2. Use a payment method to purchase the desired amount of bitcoin.
3. Move your newly acquired bitcoin to a secure wallet.

Of course, nothing is as easy as it seems. Each one of these steps can easily determine the experience you will have while buying bitcoin. Making the wrong decision can result in unwanted fees, purchasing bitcoin at a much higher rate than usual, or just being scammed out of your money completely.

Bitcoin Exchange Options

Unlike standard fiat currencies, bitcoin doesn’t have a single standardized exchange system. There are many different exchanges out there which are willing to sell or buy bitcoin, with multiple methods of payment, and choosing the right one is absolutely crucial.

Unlike FOREX, the fees and limitations that you have to take into account vary from one exchange to the next.

Things like the amount of bitcoin you can purchase, limit of usable cash when using credit cards or debit cards, and amount of money allowed to be transferred from your bank are all factors that will change depending on which exchange you decide to use. Let’s take a look at some of the key factors that you might be interested in when buying bitcoin.

1. Privacy

If you are interested in staying anonymous while purchasing bitcoin, then we have somewhat bad news for you. Payment methods such as Bank Transfer, Credit Card, Debit Card, PayPal, or pretty much anything that requires the use of an ID might as well be ruled out.

All of these forms of payment aren’t very private, and usually the bitcoin seller will request a copy of your ID to protect their transaction.

The most private way to purchase bitcoin is through the use of cash or a direct cash deposit. However, these types of transactions are often saturated with scammers who use privacy as leverage to trick you into making unsound decisions, which often conclude in loss of money.

If privacy is of utmost importance to you then we strongly suggest you choose a seller who is reputable and has many transactions on record with plenty of positive feedback. In fact, the best way to choose which seller to use for cash transactions is through networking and communications.

Become part of an exchange forum or chat group, talk to people, and determine who is trustworthy and who is not. Stay away from people who are new in the exchange or who have a negative reputation or feedback.

2. Transaction Limits

As mentioned above, each exchange will have its own limits for each transaction type. Some will allow you to use more money with a Bank Transfer; others will have higher Credit Card transaction limits.

Each exchange has a good reason why they choose to prioritize one transaction type over another. Your job is to find the right exchange that will suit your most frequently used transaction methods.

If you are planning on using your Bank as the direct source of funding then one of the best exchanges out there is Coinbase. Their weekly Bank withdrawal limits are one of the highest we have seen among most bitcoin exchange websites.

If you are planning on using your credit card as the primary method of funding, then CoinMama might be the best choice for you. They have a very high credit card purchase limit, but keep an eye out on their fees. Credit card purchases are usually pricier for the exchange, so they generally add high transaction fees for credit card transactions.

In general, most exchanges don’t have limitations for the amount of bitcoin you can purchase. However, each individual seller might have their own limit on the amount of bitcoin they can provide.

When dealing with high amounts of bitcoin purchases, we strongly suggest that you take appropriate steps to ensure that your seller is legitimate and they have plenty of positive feedback. The last thing you want is someone scamming you out of your money.

We encourage you to take frequent screenshots and chat with the seller prior to completing the transaction. While most exchange sites do not ensure transactions with their own insurance, there is a possibility that your bank or other financial institution can reverse a chargeback or other fraudulent activity in an event that you are scammed.

3. Transaction Speed

First and foremost, keep in mind that each bitcoin transaction has to be validated by the blockchain. This means that someone out there on the bitcoin network has to certify that your transaction is valid and everything is peachy. This validation can vary in timeframe depending on the exchange that you decide to use.

Some exchange websites might charge you an additional fee if you want your exchange to be instant. Please keep in mind that a transaction isn’t considered to be complete unless there have been 3 external verifications done on it.

Then there is the first time user effect. Obviously if you are buying bitcoin for the first time, the purchase process will take longer. Most likely you will need to verify your identity with your exchange, and then you will have to set up some sort of an account here or there. Filling out some of the information on your profile might be a good idea, too.

All of this will take time to set up, but once you do it for the first time then you won’t have to do it again and the next transaction will be much faster.

Then there is the time needed to complete each transaction depending on the method of payment and other factors.

For example, if you are planning on buying bitcoin with PayPal then you will need to get the sellers PayPal e-mail first, transfer the money to their account, wait for PayPal to finalize the transfer, and then wait for the seller to verify it and finally release the bitcoin to your wallet.

This is all assuming PayPal even allows you to complete the transaction, as they keep changing their stance on whether buying bitcoin with PayPal is allowed or not. Bank transactions usually take longer because it can take up to 5 days for a bank to verify fund transactions.

However, if you need bitcoin right away and are willing to buy it with any method of payment possible then your alternative is to look for a seller who is offering instant buys for specific payment methods.

Again, this usually attracts scammers and people who are looking to leverage speed against you in a way to get more out of you then you are willing to offer, be it complete scamming or simply increased purchase rate. Either way, always be on a look out for scammers.

Finally, if you are one of the lucky people to happen to be living next to a bitcoin ATM, you can always instantly exchange your fiat currency for a desired amount of bitcoin though these specific ATMs. There are currently very few locations across the US that have bitcoin ATMs installed, so going online might be a better choice for you.

4. Rate

When talking about fiat currencies, the exchange rate is agreed upon by all FOREX markets and the price for converting one currency to another is generally the same no matter where you decide to trade. This isn’t the case for bitcoin.

While generally you can look up the current average price per bitcoin between all the bitcoin exchange sites, there isn’t a set price per bitcoin that everyone is agreeing to. Each exchange will have a slight difference between their bitcoin pricing.

Furthermore, each seller will have a different price they are willing to offer the buyer depending on the method of payment they are willing to use. This is where security and convenience come into play.

For example, it isn’t a rare sight to see bitcoin buyers offer gift cards as a method of payment for bitcoins, and because this somewhat of an inconvenience these users usually offer much higher rates for the bitcoin transaction.

The two most commonly used websites for figuring out the current price of bitcoin are BitcoinAverage and CoinDesk. Both of these websites use all major bitcoin exchange sites to average the price of bitcoin.

Use these sites when comparing the exchange rate on your exchange site of choice. This way you can determine whether the seller is giving you a good price or not.

5. Validity

We have talked frequently about making sure that the sellers you choose have excellent reputations and there aren’t any suspicious red flags that you come across when choosing the right seller. You should also keep in mind that this diligence and caution should be applied when selecting the exchange you are planning on using to buy your bitcoin.

Always ask yourself: has this exchange been around for a long time and are there plenty of traders using the exchange with good reputation? What about the quality of the website? How about their transaction process? All of these should play a major part in your decision making when it comes to selecting the right bitcoin exchange.

Another thing that many people fail to check is where the exchange is based out of. We shouldn’t be judgmental, but trading bitcoin with an exchanged based out of a difficult to pronounce possibly third world country might not be such a good idea.

With that said, there might be a perfectly plausible reason for why some of these bitcoin exchange sites are located in questionable areas, like fees and regulations that they might be able to save on when operating out of these countries.

So take everything with a grain of salt. When in doubt always ask questions. Use the support that the exchange can offer and if they don’t have a support section then we strongly suggest you find another exchange.

6. Fees

We mentioned this a little before but we need to put a bit more emphasis on it. Each exchange will charge you fees for pretty much everything. If they have a wallet, then adding BTC to that wallet will cost you. If you want to transfer BTC from the exchange wallet to an external wallet, chances are this will cost you too.

There are very few exchanges that don’t charge for transferring money to your account on the exchange website, but if they don’t chances are there are other locations that they will end up making their slice of cake off of you.

We urge you to get as much information as possible when selecting the exchange of your choice. If the fees aren’t listed anywhere on the site, and trust us when we say there will be fees, then you need to contact the support team and get this information.

The last thing you want is exchanging thousands of dollars of BTC and getting hit with an unknown 10% fee. This can be detrimental to a trader and an investor alike.

7. Payment

Yes we know, we mentioned this before, but we feel like we should mention it again to make sure that you are on the right track to the right bitcoin exchange.

Just like not every store accepts your Black Super Platinum American Express card, it is a high possibility that a bitcoin exchange might only be capable of accepting a select few methods of payment. Many of these exchange sites accept direct Bank transfers, which as we mentioned before take the longest amount of time to complete.

Some focus only on credit cards or debit cards, but the company behind these cards also matters. While most will accept Visa, MasterCard, and other cards, some more expensive cards might not be accepted, so please make sure that your method of payment is acceptable by the exchange of your choice.

Then there is the security of transaction. Some methods of payment are more secure than others. Unfortunately due to how quickly and carelessly PayPal is willing to withhold funds from your account, it is one of the riskier methods of payment.

Imagine selling bitcoin and receiving PayPal funds in exchange, then a few days later those fund are withheld for some arbitrary reason that was fabricated by the buyer. While PayPal does allow the exchange of bitcoin for their funds, reversing the withheld money might be a headache.

This is the reason we suggest you take screenshots as you proceed with each transaction.

Payments In-Depth

Now you have a general idea of which payments are accepted by most exchange sites, but there are a few other things we need to mention for some of these payment choices. Let’s dive a little deeper and see what else we need to know about each payment option that the exchange might accept for their transactions.

1. Credit And Debit Cards

Credit cards and debit cards are the most used methods of payment for purchasing bitcoin. The biggest reason why so many choose to use debit and credit cards is because this is the preferred method of payment for nearly all online retailers like Amazon or Overstock.

One of the biggest positives to using credit or debit cards is that the delivery of bitcoin is nearly instant once the initial blockchain verification is complete. This means you will have access to your bitcoin within minutes of completing the transaction.

In addition, pretty much everyone is familiar with using credit or debit cards online and they already know the process, which makes it just that much easier to purchase bitcoin. It’s no different than buying anything else online.

Something you might not be in favor of is the fact that many bitcoin exchange sites usually charge higher fees for using debit or credit cards as payment. This is due to the credit card companies which also charge the merchant for each transaction.

Because bitcoin can be bought in fractions, purchasing a small amount of BTC can result with merchant fees being much higher than the worth of the transaction.

So in response, the exchange site charges the buyer a fee for using debit and credit cards to deter small transaction and to cover some of the fees they have to pay for being able to accept these cards as payment.

Another reason you might want to stay away from using credit or debit cards is privacy. Most sellers will ask for an ID to verify that the debit card or credit card does indeed belong to you. So if you are interested in buying BTC anonymously, then credit cards are not the best choice for you.

2. Bank Transfer Or Bank Account Link

This method of payment is considered to be one of the best choices if you are interested in buying a large amount of bitcoin. In most cases, a bitcoin exchange will have higher weekly limits on depositing from a bank or purchasing via bank account directly.

So if you are looking to purchase a considerable amount of bitcoin, definitely go with a direct Bank Transfer or Bank account link.

Additionally, using your bank directly will often result in the lowest fees. It is a possibility depending on the size of the withdrawal or transfer that your bank will charge you for the transfer. Generally though, they are pretty low when compared to other methods of payment.

The good news is that you can use pretty much any bank in the world for these types of transactions, as long as you provide a valid ID. So while this is good news for most global users, it’s not such good news for those who are seeking privacy.

Then there is the issue that we all have experienced in the past with bank transfers, which is the time frame they require. In the US it usually takes up to 5 days for a bank transfer to be complete. This means that by the time you are able to purchase your desired amount of bitcoin the price might be completely different.

Bank account payments are generally used for a long term bitcoin investment strategy and require a bit more planning when buying the bitcoin.

3. Cash

The good old saying “Money talks” certainly holds plenty of water when using cash for bitcoin transactions. Cash deposits or hand to hand cash transactions are one of the most private methods to purchase bitcoin. However, just like with many things that are oh so convenient, these transactions come with a cost.

Generally, cash transactions are marked up in price anywhere between 10-15%, which means you are losing out on your investment. But if it is a price you are willing to accept for privacy, then go for it.

The positive side of cash transactions is that the exchange is nearly instant, so you don’t have to wait an unknown amount of days to ensure everything went through correctly or to be able to use your BTC. But then again, with cash and anonymity there is always a possibility of attracting crime.

The chances of being scammed or robbed when using cash as payment for BTC are pretty high, and we strongly suggest taking precautions to ensure you aren’t robbed blind.

There is another alternative to get bitcoin by using cash directly, although you have to be lucky enough to live in the right area. Even though there aren’t many of them throughout the US right now, ATMs designed for purchasing bitcoin do exist.

The bad news is that they are usually marked up pretty high, but if you want to stay anonymous and safe then chances are using one of these bitcoin ATMs is your best choice.

4. PayPal

Let’s start with this; if you have PayPal then chances are you already have a Bank Account Debit Card or Credit Card. If you have one of those methods of payment then we strongly suggest you use one of them instead of trying to use PayPal as a way to buy bitcoin.

Firstly, PayPal’s terms regarding bitcoin are that merchants are not allowed to sell bitcoin via PayPal. Of course this can be easily bypassed because PayPal can be used for nearly any other service as payment. So we can, for example, buy some other form of digital good and exchange that for bitcoin without technically breaking PayPal terms and conditions.

Secondly, PayPal is scam heaven when it comes to bitcoin trading. These scammers will offer you ridiculous mark ups or mark downs in an attempt to weasel money out of you and many people end up falling for it. If you see numbers that are too good to be true and PayPal is attached to them, run and don’t look back, trust us.

Lastly, even if you successfully bought bitcoin through PayPal via the digital good route, chances are you paid a ton for that transaction. Generally, PayPal will charge a percentage in fees for services when using it as payment.

Frequently Asked Questions

Now that you have most of the information needed to sell bitcoin, you might have some questions. Here are some of the most frequently asked questions that we have run into that most new buyers or sellers are asking.

Why Does It Take So Long To Buy Bitcoin?

The primary reason that it takes such a long time to buy bitcoin is usually due to the method of payment used to complete the transaction. Transferring bitcoin from one wallet to another usually doesn’t take more than 10 minutes, since it has to be verified on the blockchain.

However, some payment methods, like a direct Bank Transfer might take up to 5 days to complete. Unfortunately, we hold no power over these time frames and chances are you won’t be able to speed them up. Try to choose an alternative payment method which is instant.

When Should I Buy Bitcoin?

This is a very tricky question. Because the bitcoin market is currently so young, it is also very volatile. Like most currencies in their young years, expect to see plenty of movement in the bitcoin prices as the currency matures. With that said, bintcoin has recently made huge headway in the currency world and its price increased drastically.

This spike in price can be caused by any number of factors, and unfortunately it can’t be predicted or evaluated carefully because of the currency’s instability and lack of maturity. However, one thing is very likely: if you wait for the right time and purchase bitcoin when they are low chances are you will come out on top.

We can’t make any suggestions as to whether you should hold on to your bitcoin stockpile or drop it. There are far too many factors that need to be accounted for and honestly this is nearly impossible at the moment, so as always, trade at your own risk.

The Exchange I Chose Wants Me To Upload An ID, Is This Normal?

Each exchange will have its own rules and limitations. Some sites are bound by laws, such as the KYC (Know Your Customer) laws which basically force the exchange to keep a real world identity of each client that uses their services. The laws are superimposed by the country where the exchange is located. Often they are there to protect your investment.

Can I Sell Bitcoin?

Of course you can! Most of the exchange sites that allow you to buy bitcoin will also allow you to sell the bitcoin to desired users or clients. They might have different rules in place for selling bitcoin rather than buying bitcoin, so pay close attention to each exchange site’s regulations.

Who Can Buy Bitcoin?

There are no specific permissions o requirements needed to use bitcoin. However, recently many countries have been stating their position regarding the use of cryptocurrencies. We suggest you check the legality of bitcoin in your country of residence.

With that said, most residents around the globe are allowed to use bitcoin without limitations by their countries government.

One Bitcoin Is Too Much. Can I Buy An Increment Of Bitcoin?

Yes, this is a possibility. Bitcoin were created in a specific way which allows them to be incremented up to the 8^th decimal point. While this will allow you to split one BTC into much smaller increments, keep in mind that each exchange site does have a minimum requirement for trading BTC. Most will allow you to buy or sell as low as $5 worth of BTC.

What About Physical Bitcoin Coins?

While the idea of having a physical coin that has a key embedded inside of it which represents a single bitcoin is somewhat unique, the problem is that you have to be willing to trust the creator of this coin. In theory nothing is stopping them from withdrawing the bitcoin and moving it into their wallet while you are left with an empty shell of a coin.

We only suggest buying these physical coins if you plan to withdraw the BTC immediately and keep the coin for sentimental value, otherwise the risk for a scam to occur is far too high.

How Do I Get A Bitcoin Account?

This is a common misconception. Bitcoin accounts don’t exist. When we talk about storing, receiving or transferring bitcoin, we are talking about a bitcoin wallet. Each wallet has a unique address and is stored on your computer.

So unlike in a traditional bank account scenario where your bank is responsible for keeping your account safe, with bitcoin you are the only person that should keep your wallet safe. Alternatively, if you have an online wallet with a specific online service then often they are in charge of keeping your wallet safe.

Wouldn’t Mining Bitcoin Be More Profitable Than Investing?

When bitcoin was first created, anyone with a powerful enough computer could mine bitcoin and make profit. However, over time the calculations necessary to complete in order to be rewarded bitcoin became more complex, resulting in specific hardware and software being developed for mining bitcoin.

Most computers today aren’t efficient enough to mine bitcoin with a profit. You would need to invest a relatively large amount of money to successfully mine bitcoin and make profit.

Furthermore, eventually, although it will take a long time, the reward for completing hash calculations and verifying transactions will stop and miners will only get paid through fees set by the exchange sites and other bitcoin related services.

Is Bitcoin A Stock?

While the similarity is there, bitcoin is not a stock. You can’t hop onto the National Stock Exchange and purchase a stock of bitcoin. At the moment you have to buy actual digital bitcoin yourself on the exchange of your choosing. However, there are currently attempts being made at making bitcoin ETF (exchange-traded fun) a possibility.

Why Would Anyone Buy Bitcoin?

There are plenty of reasons why someone might be interested in buying bitcoin. Many investors have noticed the impact that bitcoin has had on the financial world and how quickly it is moving up the ladder in the currency world, so they are choosing to invest into the currency by buying it and simply waiting for it to grow.

Alternatively, some people are using bitcoin to trade daily, in a similar way you would trade stock on the NSE, because it offers a few more perks then the traditional stock exchange (like never being close and operating 24/7, as well as high the volatility that bitcoin is currently going through which is also very appealing to daily traders).

But you don’t have to be an investor or a trader to benefit from bitcoin. Many online retailers like Microsoft and Overstock accept bitcoin as payment. Sending money to relatives who live outside of your place of residence is often a lot cheaper via the use of bitcoin since there aren’t as many fees related with these transactions.

Bitcoin has slowly become the currency of the internet and it is being used by more and more people every day.

Am I Limited To Just One Bitcoin Exchange?

No, you can open as many bitcoin exchange site accounts as you wish. Obviously, only open one account per exchange site and only open additional accounts on other exchange sites if you are planning on exceeding the current exchange site’s limitations.

Otherwise, we strongly suggest keeping just one exchange account open; it’s a lot easier to micromanage.

Do I Have To Pay Taxes On Bitcoin?

If you have sold, bought, and made any sort of gain with bitcoin, chances are you have to pay some sort of a tax somehow in your country of residence. In the US this has to be done for each bitcoin transaction. We suggest you check the rules and stipulations when it comes to paying taxes on bitcoin transactions and gains.

How To Buy Bitcoin Final Words

Bitcoin is slowly becoming the go to currency for most online users, but it is also branching into the offline world. Each day more and more bitcoin ATMs are being placed across the country and more people are becoming aware of this currency.

Whether you decide to buy, mine, or sell bitcoin, we always suggest you stay on top of everything you are doing. First and foremost, do your research! Not all exchange sites are created equal and some of them are simply a scam.

Just like in the real world, if it sounds too good to be true then it most likely is. There are plenty of reviews and feedbacks on each exchange out there, so read up and make your decision with knowledge by your side.

Also, use common sense! If a bitcoin seller created their account 10 minutes ago (most exchange sites will show this information) and their online handle is “qwe123” then we have a problem. Look for people who seem genuine. One thing that many overlook is the profile image. Clients who are interested in constant business will update their profile.

Also, many exchange sites will request for their clients to verify certain things like e-mail and phone number. In these cases,it is always best to make sure that your buyer or seller has a verified e-mail and phone number.

Lastly, bitcoin isn’t the only cryptocurrency out there. There are many more like it which are built on the same principals. However, not all of them are successful, and only a few are promising. Just because you see a huge upswing in the price of some fresh new currency, don’t go crazy and invest everything into it.

You need to give all of these altcoin currencies time to mature and get more stability under their belt. Bitcoin is a little over 8 years old and is still considered to be a new currency.

With that said, we wish you the best of luck when buying, selling, or holding onto bitcoin.