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Five Major Credit Cards Are Now Blocking Cryptocurrency Purchases (cnbc.com)
An anonymous reader quotes CNBC:
J.P. Morgan Chase, Bank of America and Citigroup said Friday they are no longer allowing customers to buy cryptocurrencies using credit cards. "At this time, we are not processing cryptocurrency purchases using credit cards, due to the volatility and risk involved," a J.P. Morgan Chase spokesperson said in a statement to CNBC. "We will review the issue as the market evolves."
A Bank of America spokesperson also said in an email that the bank has decided to decline credit card purchases of cryptocurrencies. Citigroup said in a statement that it has "made the decision to no longer permit credit card purchases of cryptocurrency. We will continue to review our policy as this market evolves." Earlier in January, Capital One Financial said it has decided to ban cryptocurrency purchases with its cards. Discover Financial Services has effectively prohibited cryptocurrency purchases with its credit cards since 2015.
A Bank of America spokesperson also said in an email that the bank has decided to decline credit card purchases of cryptocurrencies. Citigroup said in a statement that it has "made the decision to no longer permit credit card purchases of cryptocurrency. We will continue to review our policy as this market evolves." Earlier in January, Capital One Financial said it has decided to ban cryptocurrency purchases with its cards. Discover Financial Services has effectively prohibited cryptocurrency purchases with its credit cards since 2015.
Who do they think they are stopping me from purchasing a totally legal 'thing' with the card? "Volatility" of my purchase is none of their concern, only concern they have is if i pay my bill.
They are melting down from fear.
Need to sue the bastards.
Because they don't directly compete with our business
But chronic overspending on rapidly-depreciating consumer products—resulting in credit card abusers becoming saddled with nearly insurmountable debt—remains permissible.
We've moved to a mostly cashless society and made a handful of banks the arbiters of what we're allowed to buy.
And Bitcoin is designed explicitly to prevent this kind of abuse. Of course they're afraid of it.
To prevent banks to tell you what to do with your money.
I can see how funding speculative investments with credit shouldn't be encouraged, but what about people who have the money in the bank? Are they doing anything to debit cards?
It's due to the risk of chargebacks from people that buy something that subsequently loses value. You often can't buy stocks using a credit card for the same reason.
They are probably worried about chargebacks. Both for legitimate cases where the consumer got ripped off, and for cases where a stolen card is used to buy crypto. If the CC banks can't stick it to the vendor, they have to eat the loss to stay on the right side of their promises and consumer protection laws. And in this case, they must have seen enough abuse to decide to shut down that vector.
I recently made a purchase from a place that offered a bitcoin discount. I said "Ah hah, I'll be clever." and bought some on coinbase with my credit card to make the purchase.
Holy hell did I ever get shafted up the ass with fees. Ten bucks for buying a "cash equivalent", two bucks for "foreign transaction", five bucks to buy the bitcoin on coinbase, and another five bucks to send the coin with coinbase. The discount was big enough to eat most the fees, but I still lost out. Lesson learned I guess.
Like for example the purchase of illegal drugs?
What happens if an unscrupulous bitcoin dealer (Yes, I know, it is so unlikely - all the bitcoin dealers I know are incredibly honest. The idea of one bending the law is unthinkable... ;D) codes the sale as "one flash drive with associated software, price $88,000 + $15 handling fee". After it goes through, will they cancel the sale and reverse the charge? Will they demand to see the software on the flash drive? Will they cancel the merchant account of the seller without seeing the bitcoin on the drive?
Morons pass stupid rules that do nothing except PROTECT THE COMPANY from being sued.
excitingthingstodo.blogspot.com
This is the very reason Bitcoin was invented. One of the main things people don't like is how banks and credit card companies can CONTROL what we buy. If I want to buy Bitcoin I should be allowed it is my money (or borrowed money to spend as I like). If I lose my money that is my fault and my problem. The credit card companies are freaking out because they are loosing control of people and the money, and the trillions of dollars they make each year. If Bitcoin or another currency takes over they loose control and all their earnings. So stopping people from buying it is how they can continue to control us! All this does is make us want to get away from them soooooo much faster.
No, you buy crypto and use it to pay your bill. And earn cash back/rewards points while doing so. Rinse, repeat.
Then get raped by the IRS at 40% capital gains tax for all sales, good plan if you're gay and can't afford buff prostitutes, bad plan otherwise.
the major banks could easily take it over. Hell, there's tons of evidence that the price has been heavily manipulated by the various exchanges, and they have a fraction of the power of a bank. They're not afraid, they don't want to deal with the risk of disputed transactions (especially in jurisdictions where disputes are tightly regulated).
The best antidote to banks controlling a cashless future is government regulation. Somebody has to be in charge of the money supply or it'll become unstable and wreck the economy. But giving somebody that power inevitably results in a strong concentrations of power. The only effective counter balance to that is Democracy. This is one of the reasons the left has been pushing for mandatory (and anonymous) voting. It really is a civic duty at that point.
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If you really want to protect consumers, block purchases of garbage like in-game currency.
“Common sense is not so common.” — Voltaire
Capital gains taxes cap out at 20% (28% for art). And that's if you hold it for more than a year. If you realize the capital gain within 1 year, you pay regular income tax, which caps out at 37% for income over $500,000 (the top 1% average about a 27% tax rate).
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
I keep forgetting, its complicated. Never had one b4...
[($)]
Requiem for the American Dream
Short term capital gains (realized in under a year) are at approx 40% (the maximum income tax rate,) long term capital gains taxes (held over a year) are at approx 20%. Hence, if someone were to do as the AC suggested and buy cryptocoins with their credit cards then sell them and pay off the card before interest accrued (within the month) to game the money back portion they would in fact be getting assraped at 40% of those cryptocoin sales (they are taxed as commodities in the eyes of the IRS.)
$1000 worth of Volative lap dances at a strip club is no problem.
Buy Bitcoin with a debit card. That's YOUR money (as opposed to CC funds loaned to you by some financial institution) and you can spend it as you please.
Have gnu, will travel.
This whole discussion is hilarious. People are upset about not being able to use their credit cards to buy a "currency" that's designed to avoid using credit cards.
I don't respond to AC's.
Only if you gain. Selling for the purchase price does not create a gain. And not 40% of course, but that's not the point.
Matter more than an attempt to dictate good spending habits. The credit card companies fear blow back from the price of the bitcoin moving significantly during the time it takes to formalize the transaction, which on bitcoin can be several 10s of minutes.
You've got so many concepts all mixed up that I'm not sure where to begin... you seem to think that somehow democracy is going to prevent a government from abusing a monetary policy.
A democracy has never prevented this - if anything, a democracy has sped decline due to the people (demos) voting power (kratia) into their own pockets - welfare and social programs. The first and best example of this was Athens violating treaties with neighboring cities by stealing money and resources that were intended for the defense of all the Greek world, and instead spending it all on local fortifications and public works project - i.e. - the Parthenon. That pissed off many, especially the Spartans, and after a little skirmish of 30 years, Athens fell, Sparta was weakened, and the Greek world never recovered. The Macedonian punk named Alex wasn't Greek, but that is another matter...
Lets fast forward a bit to an empire established as a representative democracy - Rome. Due to years of over spending and failed social and foreign policy, they went broke and tried to solve their fiscal problems with regulation.. That didn't work out too well for them, resulting in every last vestige of their economy running off to the far corners of their empire to escape regulation . Byzantium didn't get the memo and lingered in relative isolation while contemplating their navels for a thousand years. The best and brightest of the eastern half of the Roman empire fled to Persia when their ruler tried to regulate religion, which led to all sort of abominations like algebra and medicine.
Regulation, while starting off as well meaning, generally ends up pissing off more people than it helps.
Fast forward to a time a little more recent, but probably still distant history to most of you, and you may discover that the savings and loan crisis and quantitative easing were, in part, catalysts for the Great Recession, all of which can be trace back to more regulating regulations in the name of social justice
So if you really think regulation and some fanboy cryptocurrency of the month is going to save the economy, or the world, then don't be surprised to meet me while I'm looting the wood from the walls of your house to heat mine, when the economy falls flat on it's face and the empire is overrun by barbarian hoards.
Let the banks assess risk as they see fit. If they don't want to lend you money for some purchase, then get your money some other way, plain and simple. You are even welcome to come try and take my money. Go ahead. I'll be waiting.
The best antidote to banks controlling a cashless future is government regulation. Somebody has to be in charge of the money supply or it'll become unstable and wreck the economy. But giving somebody that power inevitably results in a strong concentrations of power. The only effective counter balance to that is Democracy. This is one of the reasons the left has been pushing for mandatory (and anonymous) voting. It really is a civic duty at that point.
"Every time I see an adult on a bicycle, I no longer despair for the future of the human race." - H. G. Wells
The banks just watched millions of homeowners gamble with the bank's money, and it blew up in the banks' faces while debtors walked away from the burst bubble. And that was with tangible collateral - not digital currency.
I guess the banks didn't learn much from the Great Recession.
This is not about volitility or any other type of consumer protection. This is about protecting their points programs.
Basically, people were buying crypto coins on their credit cards, getting the points for the purchase, then immediately selling the coins and paying off the card. The points more than made up for the transaction costs.
Since all these cards were being paid off before any interest accrued, the credit card companies were losing a lot of money on the transactions in the form of reward payouts.
The CC firms will never admit this publicly, but given the number of people I knew who were doing this, I’d bet this is the real reason they’ll disallowing the purchases.
No such thing as a free lunch, even though it's effectively 90% of the message of all marketing these days.
"The discount was big enough to eat most the fees, but I still lost out."
It's almost like a company offering a bitcoin discount in the context of their business is better positioned to know who will come out on top in that kind of exchange. (It should be immediately obvious they can at least benefit from some economy of scale from a fee standpoint.)
"Old man yells at systemd"
Why wouldn't it be?
"Old man yells at systemd"
If you're implying the discounting business got the fees I mentioned, they did not.
Back before the housing crash, how did you feel about mortgage lenders making loans to people who they knew were likely lying about their incomes ("no doc loans") and only could pay off the mortgage if the housing market continued to spiral up at a death defying speed?
When the bank foreclosed, did you say - "The bank shouldn't have loaned such a poor risk the money" or did you say "Good for the bank, the fact the homeowner lost their entire down payment is their stupid fault"?
(I said " "Good for the bank, the fact the homeowner lost their down payment is their stupid fault", but I also said "Stupid banks lost money - the idiots shouldn't have loaned to such poor risks". I.e., I believe in personal responsibility on both sides).
You can still get payday loans or loans from Guido your friendly neighborhood loan shark to fund your cryptocurrency speculation.
But I can still buy penny stocks, right? And options?
Thank god, not all options to trade in highly volatile investments are banned. Only the ones they don't participate in.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
State governments can't stand up to global mega corps. They get bought out and overwhelmed one by one. Meanwhile the mega corps build central governments for their own use which the small government proponents refuse to participate in on principle and therefore end up being crushed by.
Sorry, You're going to have a powerful central government whether you like it or not. They're just too useful. The only question is are you going to have a seat at the table.
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NT
I am all too willing to point out that bitcoin is not an investment. But there is no reason people should be blocked from purchasing small amounts of it so as to do transactions. For a credit company that should probably be $1000 over a couple months.
The value of bitcoin is the amount of transactions done with it. The more transactions you do and other people do the more you should keep a certain amount of it rather than converting it with every transaction.
Bitcoin itself has a slow 15 or so minute transactions rate so it is not good for everyday retail purchases. Rather is has become the defacto "savings account" currency whereas other ecoin can function more as a "checking account" and can do transactions faster.
If there is one thing I absolutely need the bank issuing me a credit card to do, it is to prevent from buying things that I may not realize are risky.
If I was feeling generous, I might think that CC companies were trying to save stupid people from themselves. And having to swallow their unpaid debts. If you don't have money to gamble with, then you shouldn't buy BTC or trade Forex.
Banks protect YOU? ... Let me assure you, they couldn't care less about YOUR welfare. They are interested in THEIR welfare, not YOURS.
You can't see ANYTHING from a car, You've got to get out of the goddamned contraption and walk...Edward Abbey
If you buy 100 worth of bitcoins, and it goes up by 10%, and then you pay your 110 dollar bill, you have made 10 dollars. That counts as $10 of income, not $110 of income. If this was some longer term thing then a lower capital gain rate applies.
Pegged to the price of pork, its value will soar in the Mad Max future criplecurrency enthusiasts have been masturbating to for decades.
HUGE derivative potential.
Mit der Dummheit kämpfen Götter selbst vergebens
Because you are all not "Adult" enough to make your OWN purchasing Choices.... SMH!
The proper answer is that they should formally recognise bitcoin as an actual currency and treat it as such. But that would put them in what they alone perceive as a far worse situation, which is to have to formally accept and acknowledge that their institutional monopoly has a competitor.
I bet the reason for this is that too many cardholders are using the credit card company's "buyer protection" service to get money back from a bad bitcoin investment. That way the bank gets involved, and loses money, and now therefore won't allow bitcoin purchases at all.
This sounds very credible to me. If I had mod points I'd mod the parent up.
What is the maximum Federal income tax rate? HINT: it's not 40%. And the effective Federal income tax rate, for the top 1%, is 27%, which is quite a bit off from 40%. Long term capital gains taxes for the vast majority of people are 0% to 15%. If people did what the AC suggested, they'd probably pay between 15% and 20%, depending upon their level of income.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
Before it was that people were having their credit cards stolen to buy crypto (wow, first time I've ever heard of CC's being stolen online). Now it's volatility and risk. I bet. This is just banks trying to prolong people's abilities to make money elsewhere, other than within the big bank's domain (where they make money off of all of us, so why WOULD they support crypto?).
Credit cards have some real advantages. For example, if someone else makes transactions on my credit card, there's extra items on my bill. If someone else makes transactions on my debit card, I'm out money. In each case, the card company has to go through a process that safeguards me, but I prefer the one that doesn't take money immediately out of my bank account.
In addition, they provide float. I normally pay for things an average of a month or month and a half after I bought them.
They can provide other benefits. When I use my Amazon Visa, I get a certain number of points that are useful to buy things on Amazon.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
What was more common was adjustable-rate mortgages which the borrower could afford only when interest rates stayed low. There were also NINJA loans (No INcome, Job, or Assets). In the database I was working with at the time, these were listed as "stated income" and "stated assets", which almost certainly means lies, since if you bothered to establish your income and assets you'd get a considerably lower rate.
The general idea is that Sam buys a house with a liars' loan, its value goes up, and Sam defaults. The bank forecloses and sells the house for more than the initial mortgage, the bank doesn't lose money, and Sam probably winds up with a little. (The financial modeling I was doing then had a parameter for how fast the housing market went up, and they weren't interested in projections with negative numbers there.)
The other general idea is that, if you issued mortgages, you could immediately sell them to financial institutions that would slice them up into tranches and sell the tranches. (You have a lot of loans, some of which will be bad. You establish four tranches. Each tranche gets the money paid on the loans in order, so the first tranche would get the full income stream, the second would get what was left over up to its nominal income stream, and so forth.) At some point, financial institutions seem to have overlooked the possibility that it could fall apart. People who invested in the mortgage scam got better returns than those who didn't until the house of cards blew over.
I can't blame Sam all that much. Sam probably knew little about finance, and was assured that he could get a house by someone who appeared to know a lot more than Sam did. However, the mortgage companies and banks and other financial institutions really should have known about finance. I blame them.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
Um, it's their card, and their money. They don't really give a crap about your physical, mental, or spiritual health. They're interested in making money. All their restrictions are based on that.
They apparently think bitcoin purchases are more risky than donut purchases. If you're a reasonably good credit risk, you'll be able to pay off the donuts when the next bill comes. However, if you max out your card on Bitcoin, you may be relying on that investment to pay the credit card company.
The bottom line is that it's their money, and they are letting you borrow it for certain uses. If you want to buy Bitcoin, either get a credit card that allows it or use a debit card or another form of your own money.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes