How to Buy Cryptocurrencies With Prepaid Card

Prepaid cards, also referred to as pay-as-you-go or everyday cards, are used in a manner similar to debit and credit cards to make purchases of goods and services. Prepaid cards are still preferable for daily use over credit/debit cards due to a number of important distinctions between the two.

What Are Prepaid Cards?

The majority of the time, people receive them as gifts for milestone events like their birthdays, weddings, or other celebrations. They work exactly like a regular debit card or credit card and can be topped up with any amount of money you like. The two most widely used card manufacturers are Mastercard and Visa.

Prepaid cards allow for unlimited spending, but typically have lower spending limits than conventional cards. Most importantly, there are enough crypto exchanges that accept prepaid cards as a method of payment for bitcoins or other cryptocurrencies.

How to Buy Bitcoin With Prepaid Card

1. Choose a Bitcoin exchange – we recommend Coinbase for prepaid cards
2. Create an account
3. Deposit funds into your account, entering your prepaid card details
4. Search ‘Bitcoin’ in the drop-down menu
5. Click ‘Open Trade’ and select an amount of Bitcoin to buy

Buying Bitcoins Instantly With Prepaid Cards Without Verification

You can purchase Bitcoin instantly and without verification on some cryptocurrency exchanges using a prepaid card. Even so, there are not many of these exchanges, and some of them have restrictions on the quantity of Bitcoin you can purchase without identification.

You can purchase Bitcoin without having to provide any verification by using P2P marketplaces like Binance, but the risk of losing your money is higher because they lack the same level of security as regulated brokers.

It’s also important to note that, despite the fact that reputable brokers ask you to confirm your ID, they keep your information private. In order to safeguard user privacy and promote safe trading, it is both a part of their policy and mandated by law.

Pros & Cons of Using a Prepaid Card for Buying Bitcoin

Although it is not the cheapest option, buying bitcoin with a prepaid card allows you to complete transactions more quickly and efficiently. In light of this, let’s examine the benefits and drawbacks of employing this technique.

Pros

• Unlike wire transfers, you can instantly purchase bitcoin using a prepaid card.
• It’s a more practical and open way to purchase cryptocurrencies.
• The risk of incurring debt is reduced because you can only use the money that is on your card.
• As a result, it’s a more secure way to purchase BTC since you provide less information about yourself.
• They can only use the money on your prepaid card, not the money in your checking accounts, even if it is compromised.

Cons

• The fees are comparatively more expensive.
• Prepaid cards aren’t generally accepted by a lot of reliable cryptocurrency exchanges.
• There may be restrictions on how much Bitcoin you can purchase with a prepaid card.

Withdrawing Bitcoin from a Brokerage Account

Leaving your bitcoin in your brokerage account is a bad idea, regardless of whether you plan to keep it for a long time or sell it later. Because exchange platforms are centralized, they are more likely to be hacked, which means you could lose your coins.

To avoid this, you can withdraw your bitcoin to a digital wallet, where you can sell it, transfer it to another cryptocurrency exchange account, or keep it as a long-term investment. Crypto wallets enable you to store your cryptocurrencies more securely and out of the reach of third parties.

However, you must sell your bitcoins in order to withdraw cash from your brokerage account if you have traded bitcoin, made profits, and want to do so. Although it might seem difficult, selling your bitcoin is a simple process.

Where to Buy Bitcoin With Debit Card

You must locate a trustworthy cryptocurrency exchange with a user-friendly fee structure and interface if you want to purchase bitcoin using a debit card. The top exchanges that accept debit and credit cards are all included in our ranking.

EToro – Leading Platform

eToro is one of the leading platforms to buy Bitcoin using a prepaid card. The platform offers a broad range of brokerage services for various crypto assets. These resources are applicable to both contract for differences (CFDs) and cryptocurrencies, such as Bitcoin.

The simplicity of eToro’s interface is one of its main benefits. The platform is made to be simple to use.

But since eToro doesn’t allow cryptocurrency withdrawals, you should be certain that you don’t need your Bitcoin elsewhere.

LocalBitcoins – Cryptocurrency P2P Platform

This is a peer-to-peer (P2P) cryptocurrency marketplace that links Bitcoin buyers and sellers. You will have access to an escrow service through LocalBitcoins that holds the money on your Bitcoin prepaid card until the sellers complete their end of the transaction.

Coinbase – Buy Bitcoin With a Dedit Card Quickly and Easily

One of the most well-known cryptocurrency exchanges on the market, Coinbase was established in 2012 and has more than 50 million users from various nations. One explanation for this is that Coinbase has a very user-friendly interface that enables investors to buy bitcoin quickly and easily.

The fee structure on Coinbase is a little convoluted. Instead of buying and selling spreads, it charges a commission fee of 1.49% of your trade. In addition, it establishes withdrawal and deposit fees, which change depending on the payment method. Additionally, Coinbase has released Coinbase Pro, a simpler account with fewer features than Coinbase but lower prices.

Coinmama – Buy Bitcoin With a Dedit Card in Three Clicks

In 2013, Israel saw the introduction of the cryptocurrency exchange platform Coinmama, which is now active in 200 nations worldwide and in the majority of US states. Ten cryptocurrencies are supported by the exchange, and when you buy any of them, they are sent right to your personal wallet. Although the broker accepts a number of payment options, including credit and debit cards, you must first go through the verification process before you can purchase Bitcoin.

The cost of using Coinmama is 5.9% percent per transaction, which is added to the price of the cryptocurrency. Additionally, there is a 5% fee for using a credit or debit card to make a purchase. Given that Coinmama is governed by FinCEN, it is reasonable to view it as a self-regulating platform in terms of your privacy. Additionally, it does not store your cryptocurrencies on centralized servers.

CEX.IO – Buy Bitcoin With a Convenient Mobile App

Another reputable cryptocurrency exchange platform, CEX.io, began operations in 2013 as a Bitcoin-only exchange. It controlled more than 40% of the world’s bitcoin mining capacity at the time. It focused on other cryptocurrencies in addition to bitcoin in 2015 and started accepting Ethereum.

Depending on how you trade, CEX assesses different trading fees. Instant trading requires the highest trading commission, which is 7%. However, if you opt for a more sophisticated method of trading, the trading costs are incredibly low. A fantastic mobile app is also available from CEX that makes trading on the go very simple.

Additionally, depending on the payment method you select, the exchange offers different withdrawal and deposit fees. CEX has a solid reputation in terms of safety. The platform has a FinCEN registration and license. Additionally, it offers a number of security features to protect users’ privacy.

FXCM – Buy Bitcoin Via An Advanced Trading Platforms

One of the first forex brokers, founded in 1999, is FXCM. The platform provides a small number of cryptocurrencies, including Bitcoin obviously. One of FXCM’s main draws is that it provides its users with cutting-edge trading platforms like MT4 and Trade Station.

The amount you deposited has an impact on your trading fees and spreads even though FXCM does not have a minimum deposit requirement. Your trading fees will therefore be lower the higher your minimum deposit is. However, FXCM is generally one of the best options for purchasing Bitcoin with debit cards.

Wire transfer and credit/debit card linking are the two payment options provided by FXCM. As long as there is a $40 mandatory fee for each transfer, the wire transfer method is not highly advised. However, one of the best features of FXCM is that there are no fees for deposits or withdrawals when you use a credit or debit card.

Everything to Bear in Mind When Buying Bitcoin With Prepaid Cards

Here are the things to think about if you want to purchase bitcoin using a prepaid card.

Prepaid card: Purchasing and activating a prepaid card should come first. When choosing a prepaid card, keep in mind that some brokers only accept cards issued by Visa and MasterCard. You must first activate your card before loading money onto it and using it.

Broker: Finding the right broker is one of the most important steps in this process. To find the most suitable broker in this situation, you must take your time and conduct some research. If you don’t have the time to conduct your own research, choose a broker from our list of the top brokers to purchase bitcoin using a prepaid card.

Fees: Be aware that some brokers may charge more for transactions made with the prepaid card than they would with other forms of payment. Contrary to wire transfer methods, you will receive your coins quickly with a prepaid card. Therefore, before you begin trading, review all the trading and non-trading fees the broker offers and ensure there are no unintentional costs.

Security: The security of purchasing bitcoin with a prepaid card is one of its many benefits. A broker hack will result in less data being lost because less card information is provided to the platform.

Bitcoin wallet: After making your purchase, you must locate a safe location to keep your bitcoin. The best option here is a bitcoin wallet, where you can keep your cryptocurrencies safe for a very long time. To keep your bitcoins offline, you can either create your own bitcoin wallet or order a hardware wallet.

Taxation: In the US, bitcoin and other cryptocurrencies are regarded as taxable assets. In order to avoid paying unnecessary taxes and to report your capital gain, you must make a profit from price changes.

Safety and Security When Buying Bitcoin With Prepaid Cards

As was already mentioned, when you purchase bitcoin using a prepaid card, the trading platform receives less information about you as a customer. In this sense, using this method to purchase cryptocurrencies is safer than using a credit card or debit card.

It’s not linked to your bank accounts, which is beneficial in two ways, which is one of its major advantages. First off, once the balance on your prepaid card account is exhausted, you won’t be able to take on debt when you trade. Second, if a stranger obtains access to your card, they are only able to access the balance on the card and not your accounts.

It’s extremely uncommon to be hacked when trading with reputable brokers, though. Security is an important factor we take into account when recommending a brokerage account. To keep your information secure and guarantee the security of your payments, we essentially only choose brokers who employ secure SSL protocols.

How to Store Bitcoin on a Crypto Wallet

Some cryptocurrency exchanges do not provide a brokerage account and require you to transfer your coins directly to a personal wallet, while others do. As long as keeping your coins on your exchange account is risky, you must create a Bitcoin wallet. Similar to how you would keep cash in a leather wallet, you can store your bitcoins safely in a bitcoin wallet.

Although all bitcoins currently only exist on the blockchain network, we shouldn’t take this literally. Simply put, a bitcoin wallet is a place where you store the passwords to access the portion of the blockchain where your coins are kept. Therefore, you receive private keys for your bitcoin wallet, which you can use to access your BTC, view your balance, and transfer your coins. You must be cautious not to misplace or divulge these keys, which are the doors to the blockchain. Your bitcoins would be in danger otherwise.

You can basically store our BTC on two different types of wallets: software apps and hardware devices. Software wallets, also referred to as hot wallets, are applications that we can download and install on our smartphones or computers. Compared to our brokerage accounts, software wallets are more secure, but hardware devices are less secure. However, if you trade frequently, a software wallet might be a wise choice.

A hardware device, on the other hand, is a piece of tangible equipment that aids in offline crypto storage. So, you don’t have to worry about someone stealing your coins when you order a hardware bitcoin wallet, generate your own private keys, and store our cryptos for a long time. Again, you should always keep our keys safe and not lose them because without those keys, we won’t be able to access it.

Buying Bitcoin Anonymously With Prepaid Cards

A prepaid card is a great way to purchase bitcoin anonymously. Using a prepaid card rather than a credit or debit card is an option on some peer-to-peer marketplaces where you can purchase bitcoin without verification. The issue is that buying bitcoin anonymously can be difficult. Your card information is less secure as long as you skip the verification step.

Less information is provided when using a prepaid card that is not connected to any other accounts. You will risk less money than with credit or debit cards even if someone gets access to it.

Finding a platform that permits anonymous purchases of bitcoin and accepts prepaid card payments is the first step in using an anonymous prepaid card to purchase bitcoin. One such marketplace, Paxful, allows you to purchase bitcoin straight from the seller. To register for a Paxful account and finish a transaction, enter your email address. However, it’s important to remember that Paxful has restrictions on the amount of bitcoin you can withdraw daily without verification.

Taxation on Bitcoin Earnings

It goes without saying that the purpose of trading bitcoin is to gain from changes in price. If you’re fortunate, you might end up with more money than you initially put toward bitcoin. Additionally, cryptocurrencies are subject to taxes just like any other form of income. The US IRS treats Bitcoin and other cryptocurrencies as property. In light of this, bitcoin is taxed similarly to how property is in the United States.

Depending on how long you keep your bitcoins, there are different taxes. There can be both short-term and long-term capital gains, in accordance with this classification. When making long-term capital gains, you hold your bitcoin for longer than a year before selling it, as opposed to making short-term capital gains in less than a year. Taxes are less than in the first situation in the second.

Conclusion

In conclusion, investors are increasingly using prepaid cards to purchase bitcoin. Although there might be higher costs associated with using this method, in many ways it seems more convenient and straightforward. The fact that you are limited to the amount of money on your prepaid card is a significant factor. Security is important as well, as long as you give the broker fewer details.

Finding a trustworthy broker who enables prepaid card purchases for bitcoin is one of the difficulties that could arise when using this method. The fact that not all of the top brokers accept this payment option is a problem. Prepaid card support is most widely available on Coinbase. Additionally, we looked into the industry and gathered additional respectable brokers, which you can find on our list.

However, you should carefully review all the trading and non-trading fees the broker levies and make sure you can afford all the costs before making a final decision. If you’ve finally made up your mind to purchase bitcoin using a prepaid card, you can use our comprehensive guide, in which we walk you through every step of the procedure.

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