People are Googling How to Buy Bitcoin with Credit Cards – But is it a Good Idea?
Google Trends tracks the inquiries people make using the search engine, and recently “buy Bitcoin with credit card” is on the rise, according to Cryptocoins News. This increased interest could be due to the fact that the value of Bitcoin has reached $10,000, which makes it seven times more valuable than an ounce of gold, according to the Guardian.
While people may want to invest in Bitcoin, is it a good idea to purchase cryptocurrency with a credit card? In short, no, but let’s dive deeper.
Bitcoin is a cryptocurrency, which is a tradable asset. Thus far, it has existed largely on the dark web since there is currently no centralized body regulating its trade. A recent documentary called ‘Betting on Bitcoin,’ discusses how it is particularly popular among libertarians who like the idea of the value being entirely decided by the free market. Currently, all of the Bitcoin in the world is worth $70 billion.
Some are confident about the future of Bitcoin, but others are not so sure. Former Fortress Investment Group trader Mike Novogratz told New York Post that Bitcoin is going to face some “wild crashes.”
“This is going to become the biggest bubble of our lifetimes by a long shot,” Novogratz said.
Even with this warning, Novogratz said there still could be money to be made, and it could reach $40,00 by the end of 2018.
While Bitcoin may turn out to be a good investment, it is never a good idea to buy volatile goods with your credit card. In fact, most brokers will not allow you to buy traditional stocks with a credit card. It is only Bitcoin’s unregulated status that makes this possible. Even if you can do something, though, that does not mean you necessarily should. The average credit card interest rate is 16%, which means your investment would have to earn 16% just to break even. However, the average return on most investments is around 7%.
In addition to the difficulty of making a profit, you will also be accruing debt on what could be a bad investment. If you want to invest, save some cash first.