How to Buy Bitcoin with a Prepaid Card
Looking to buy Bitcoin with a prepaid card? Well, read on. Though not the most common way of getting a hold of your favorite crypto, many places who accept Visa and Mastercard also accept this option. Prepaid cards are somewhat different than normal debit cards, because they’re typically not linked to bank accounts. Many banks provide overdraft facilities for traditional debit cards meaning that you can, in effect, use them as credit cards.
Prepaid cards on the other hand only allow you to buy goods or services with money you actually have. You may wonder why people use them in the first place, but consider this man who decided to take out an equity loan on his house to buy around 191 Bitcoin last year. If it wasn’t clear before, it should be now – buying cryptocurrency on credit is a risky business!
In the early days, getting ahold of some Bitcoin was a bit trickier. There were only a few exchanges who offered it, or you could grab some if you had the technical chops to mine it yourself. Thankfully, it has become a highly sought-after commodity and is widely available today. We’ll link to some detailed articles below if you’re looking for the steps on how to buy bitcoin with a prepaid card at a specific exchange. The process is more or less the same as with any debit or credit card. If you’re interested in buying bitcoin with cold hard cash head on over to that article for some insights. Otherwise, let’s get to it.
Exchanges That Support Prepaid Cards
CoinMama was established in 2013 in Israel and now operates out of Slovakia in the EU. It was one of the first exchanges to provide cryptocurrency purchases via debit and credit cards. Prepaid cards will also work with the service as long as they are Visa/Mastercard supported. All of the major coins like Bitcoin, Ethereum and Ripple are supported, including some alternatives like Cardano, Qtum, and Ethereum classic. For a deeper look into the platform take a look at our CoinMama review.
- User-friendly for beginners
- Excellent customer support
- Multi-language support
- Payment options
- Available in over 220 countries
- No cryptocurrency selling options available, only purchases
- Expensive trade (5.9%) and card fees (5%)
- Bank transfers limited to Eurozone countries
Coinbase is a well-established name in the crypto space and has been operating since 2012 out of the US. The company is heavily-regulated, which may concern some users who value their privacy. They do, however, provide good options when it comes to payment cards.
The fees are also noticeably lower here than with CoinMama, which is a distinct advantage if you plan to buy on a regular basis. Coinbase is in the process of adding to their list of cryptocurrencies, which is also a good sign. Support for lesser-known options like ZeroX and Basic Attention Token have recently been added. Find more in our Coinbase review.
- User-friendly for beginners
- Instant buy feature
- Reasonable trade (± 1%) and card fees (3.99%)
- FDIC insured
- Country support
- Customer support
- Account censorship
CEX is a European exchange that operates out of the financial capital of London. They’ve been around since 2013 and have become known as one of the cheapest places to purchase crypto when paying by card. Available currencies include Bitcoin, Dash, Ethereum, Ripple, ZCash, and Stellar.
Many enthusiasts are attracted to the lower card fees found on CEX. Unfortunately, they only cater in Dollars, Pounds, Euros, and Rubles right now, which means you’ll have to pay additional conversion costs if you’re transferring with another fiat currency. For more info, follow along with our CEX review.
- User-friendly for beginners
- Low trade (± 0.25%) and card fees (± 3.5%)
- Good exchange rates
- Customer support is responsive
- Help center can be confusing
- High instant buy/sell fee (± 7%)
- US clients not accepted
LocalBitcoins is different from the exchanges mentioned above as it’s more of a peer-to-peer service. The company was created in Finland in 2012. There are a whole host of alternative payment options including things like iDEAL, PayPal, Western Union, and Amazon gift cards to name a few.
You’ll have to consider security with any physical payment method, so it’s best to stick to prepaid cards where serial numbers can be transferred electronically. It’s highly recommended to start with smaller transfers so you get used to the process before going big. There is also an escrow service to mediate between buyers and sellers in the event of a dispute. Follow along with our review here.
- No limits on transfers
- Available in many countries with local currency support
- Many payment options
- Escrow service
- Flat 1% fee on buys and sells
- High spreads – buyers and sellers set the rates and are often not in line with rates on centralized exchanges
- Reported cases of fraud
- Low liquidity – there may not be that many buyers/sellers in your region
- Need to consider safety when trading in person
Paxful is another peer-to-peer marketplace that connects buyers with sellers. The number of payment options is quite remarkable, even including such prepaid cards as the Google Play Gift Card, eBay Gift Card, or a PlayStation Network Gift Card.
Just like LocalBitcoins, Paxful is widely available and allows exchange in your local currency to simplify trade. At this time they only support Bitcoin. For more details take a look at our step by step guide and review of the Paxful exchange.
- Only sellers pay transactions fees (1%)
- An extremely wide variety of payment options
- Good reputation and customer support
- Escrow and moderation service
- Poor exchange rates – prices set by buyers and sellers
- Low liquidity on some cards – may take a while before you find a buyer/seller
- Higher potential for scammers
Well, that’s our roundup. Along with prepaid debit cards, it turns out that there are actually quite a few other card options that allow you to get your hands on your favorite cryptocurrencies. Buying bitcoin with a prepaid card is not the cheapest option out there and even the cheapest exchange can set you back fees of at least 3.5 percent.
For clients in some countries, paying by card is probably the easiest and most convenient option. In most cases, however, you’d save quite a bit of money by registering with a local exchange and funding your account via bank transfers. But at least it’s nice to have the option!
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ABOUT THE AUTHOR
ABOUT THE AUTHOR
Ryan is a web designer, writer, and cryptocurrency trader who hails from sunny South Africa. He eats, breathes and lives crypto. With personal experience in foreign exchange & crypto market trading he is always trying to understand the bigger economic picture. When not meticulously looking over charts he can be found planning his next road trip or running around a 5-a-side soccer field.