Binance Now Accepts Credit Cards: Why You Should Be Concerned
Binance has become the latest exchange to begin accepting debit and credit cards, as announced on January 31, 2019. However, there are some risks involved.
Where Credit Is Due
A slew of cryptocurrency exchanges is now enabling the use of credit and debit cards for the purchasing of crypto coins. The latest in the bunch is Binance, who announced on January 31, 2019, that they now accept such forms of payment.
According to the management of Binance, the reason for this development is to encourage the increase the adoption and mainstream accessibility of crypto. Now, Binance users can make use of Visa and MasterCard to buy BTC, ETH, LTC, and XRP.
The announcement touched on some of the benefits of using credit and debit cards such as transaction speed, low fees, and convenience.
To Use or Not to Use?
While many are excited about the increase in the use of credit cards on cryptocurrency exchanges, there are some things that must be kept in mind before taking the leap.
One of the most obvious reasons is the risk of credit card debt. In America, a significant portion of the population has credit card debt that they need to pay off and this has crippled many peoples’ finances and led them to bankruptcy. In some cases, the cards were used for necessary household expenses and whatnot.
It is a rule of thumb, however, is that one shouldn’t acquire credit card debt to make investments. Sadly, some crypto users have not gotten the memo as nearly 18 percent of those who buy crypto do so using credit cards, according to a survey by LendEDU. In 2017, the phrase “buy bitcoin with credit card” topped Google search engines rankings.
The volatility of the market must also be considered. Many bought into bitcoin in 2018 believing in the constant predictions that the price would soar by year’s end. Instead, the market crashed so badly that several large firms declared bankruptcy and closed shop. Anyone who used credit cards to enter the market before that time now has made a loss and owes major credit card debt.
This practice stems back to the belief that cryptoassets are some kind of mystical asset that will make people millionaires in a short time. While this was the case for a select few, it is inadvisable for anyone to take on credit card debt to buy crypto, even if Binance allows it.