Credit Card Networks Are Charging Fees for Buying Cryptocurrency

Credit Card Networks Are Charging Fees for Buying Cryptocurrency

Coinbase, the most well-known digital currency exchange and the one most connected with recent speculations by retail investors, sent an email to a few clients early Feb. 1, alarming them that credit card issuers are starting to regard cryptocurrency purchases as cash advances, prompting to fees and higher interest on these exchanges.

Coinbase did not indicate what organizations it was referring to, and a demand for input sent to the exchange was not promptly returned.

A Mastercard representative clarified, “In recent week, we have illuminated to acquirers – the shipper’s bank – the correct exchange or dealer classification code to use for these kind of exchanges. This gives a steady perspective of such buys for the two shippers and guarantors.”

From a Reddit post written by a “major credit card/bank representative” in late January said that Visa and Mastercard clients in the U.S. and Canada were already being affected by the changes.

Digital currency exchange clients should think about using other modes of payment. As its current announcement, Coinbase acknowledges debit cards and linked bank accounts, however, purchases using these approaches can take days to finish.

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