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Can I use a credit card to purchase bitcoin?

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asked Nov 4, 2015 in Bitcoin by abc (200 points)

1 Answer

0 votes
answered Nov 4, 2015 by admin (1,210 points)
selected Nov 4, 2015 by abc
 
Best answer

Interfacing between credit cards and Bitcoin can get complicated and risky so while I've read and heard of companies that have offered that I have never used them myself.

But here is the problem to be mindful in your own dealings - when you buy with a credit card you can contact the credit card company for even quite some time after a transaction and claim the purchase was wrongful in some way. You can claim you never received the item, that it was defective, was not the agreed upon item or a host of other reasons and the company will reverse the payment to the seller/merchant and take the "money" that was paid them back. This is called a "chargeback" and is a policy followed by all credit card companies (as far as I know).

Bitcoin is not a company, however, and there is no way to reverse the Bitcoin transaction after it was made. It is also difficult for the seller to prove to a third party (sic. credit card company) that they sent the transaction.

Considering the large amount of credit card fraud, the buyer may in fact be using a stolen credit card number. In that case too, the payment would be chargedback. So a seller is taking a risk when they sell Bitcoin for credit card payments.

The bottom line is that credit cards are 50 year old technology and very, very insecure (especially on the Internet).

 

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