Summary: What You Really Get When Buying Crypto With a Credit Card
A lot of folks wonder if swiping their credit card to buy Bitcoin or Ethereum will rack up sweet rewards or cash back like their usual Amazon splurges. The reality is less straightforward than most guides let on. In this deep dive, I’ll walk you through real experiences, loopholes, and expert commentary on the true state of credit card rewards for crypto purchases. Plus, I’ll show you screenshots, regulatory angles, and even how different countries handle “verified trade” when it comes to digital asset purchases.
That Time I Tried to Get Points for Bitcoin—and What Actually Happened
Let’s set the scene: It was mid-2023, Bitcoin was surging, and I figured, “Why not double dip? Buy crypto with my travel rewards card and score points for my next trip.” Seemed logical. So I fired up Coinbase, selected my Visa, and hit buy. But instead of points, I got a warning: “This transaction may be considered a cash advance by your card issuer.” Wait—doesn’t a purchase usually earn points? Not here.
Turns out, buying crypto with a credit card sounds easy, but when it comes to rewards and cash back, the details get messy. Here’s what really goes down—and why.
How Credit Card Companies Treat Crypto Purchases in Practice
From my own digging and speaking with industry folks, here’s the uncomfortable truth: Most major US credit card issuers classify crypto purchases as cash advances, not regular “purchases.” That means:
- No points or cash back
- Higher transaction fees (typically 3-5%)
- Immediate interest accrual (no grace period)
- Sometimes, transaction blocks altogether
Don’t just take my word for it: Chase and Citi both confirm in their FAQs that crypto buys are cash advances, and “not eligible for rewards.”
I even tried with my American Express (AMEX) card, thinking maybe their Platinum perks would help. Nope—got an instant decline and a customer service email warning me not to try again.
Step-by-Step: What Happens When You Try
1. Choose Your Crypto Platform
I used Coinbase and Binance. Both let you add a credit card. Here’s what you’ll see on Coinbase:
Source: Coinbase Help
2. Attempt to Buy
Once you select your credit card, you usually get a pop-up warning. Example from Binance:
Source: Binance Blog
3. Check Your Credit Card Statement
After the transaction, log in to your credit card portal. You’ll usually see the charge coded as a “cash advance,” not a purchase. Here’s a forum screenshot from Reddit where a user shows their Chase statement:
Source: Reddit Thread
No points, no cash back, just a higher bill.
Country-by-Country: Who Lets You Earn Rewards?
Here’s where it gets interesting. In some places (think parts of the EU, Singapore, Australia), smaller banks and fintech firms occasionally let crypto buys slide through as purchases. Here’s a quick table showing the differences:
| Country | Card Issuer Policy | Legal Reference | Enforcement Agency |
|---|---|---|---|
| USA | Mostly cash advance; no rewards | CFPB Guidance | CFPB, OCC |
| UK | Most banks block crypto buys | FCA Statement | FCA |
| Australia | Some purchases count as eligible spend | ASIC Guidance | ASIC |
| Singapore | Varies by issuer; some fintechs allow | MAS Statement | MAS |
| Canada | Major banks block; some smaller banks allow | OSFI Rules | OSFI |
Expert Insights and Real-World Case: When "Verified Trade" Gets Tricky
I reached out to Sarah Liu, a compliance officer at a cross-border fintech in Singapore. She explained: “For most global payment networks, merchant category codes (MCC) determine whether a transaction is eligible for rewards. Crypto exchanges usually have an MCC that triggers cash advance rules, but some local fintechs process payments under different MCCs—sometimes under ‘financial services’ or even ‘online retail’—which can result in points, but it’s a grey area.”
Case in point: In Australia, a friend used his Up Bank debit card (linked to a rewards program) on CoinSpot and received points. But a week later, the bank reclassified the merchant, clawed back the points, and issued a warning. There are whole threads on Aussie FIRE forums about people chasing these loopholes and getting burned.
In the US, I’ve personally tried buying crypto with a Discover card on a smaller exchange, and the transaction went through as a purchase (with 1% cash back). Two months later, Discover sent a notice: “Upon review, crypto transactions are not eligible for rewards. Points have been removed.” So even when it works, it often doesn’t last.
Table: "Verified Trade" Standards for Crypto Purchases by Country
| Country | Standard Name | Legal Basis | Enforcement Agency | Notes |
|---|---|---|---|---|
| USA | "Verified Trade" – Bank Secrecy Act (BSA) | FinCEN | FinCEN, OCC | Strict KYC/AML for all crypto buys |
| EU | "Verified Trade" – MiCA Regulation | European Parliament | ESMA, EBA | Unified reporting requirements |
| Singapore | "Verified Trade" – Payment Services Act | MAS | MAS | Strict but fintech-friendly |
My Take: Should You Chase Credit Card Rewards on Crypto?
In my experience, unless you’re in a rare country where your bank codes crypto buys as regular purchases and doesn’t claw back points, it simply isn’t worth it. Most people I’ve chatted with in the US, UK, and Canada either get hit with cash advance fees or lose their rewards after a delayed audit. The only consistent benefit is speed—but you pay for it.
A funny misstep: Once, I tried a workaround by funding my PayPal account with a credit card, then using PayPal to buy crypto on a supported exchange. PayPal blocked the transaction and flagged my account for “unusual activity.” Lesson learned—banks and payment networks are constantly updating their systems to catch these edge cases.
Experts agree: Unless you’re comfortable with the risk of fees, interest, and surprise clawbacks, focus on using debit cards or bank transfers for crypto purchases. The only exception might be promotional deals from fintechs or new crypto platforms, but always read the fine print.
Conclusion and Next Steps
To sum up: For most people, buying crypto with a credit card does not earn rewards or cashback—and can cost you more in the long run. Regulations, merchant coding, and bank policies are evolving, but the trend is toward tighter restrictions, not more perks. If you absolutely must use a credit card, check with your issuer first, and be prepared for fees and potential loss of rewards. Otherwise, stick to safer payment rails.
If you’re interested in the nitty-gritty of how “verified trade” is defined or regulated in your country, I recommend checking your national financial regulator’s site or consulting a compliance expert. And if you do stumble on a rewards loophole, enjoy it while it lasts—just don’t count on it for the long haul.
Author: Jamie Lau, compliance analyst and fintech writer, with firsthand experience in cross-border payments and crypto onboarding. Sources include Chase, Citi, CFPB, MAS, ASIC, and verified user forums.