The Bank Had Allegedly Charged The Plaintiff Over $160 In Fees And Interest For Regularly Purchasing Cryptocurrencies With His Credit Card
A class-action lawsuit accusing JPMorgan Chase of overcharging customers using their credit cards to purchase cryptocurrencies has been settled out of court.
Plaintiffs Brady Tucker, Ryan Hilton and Stanton Smith notified the U.S. Southern District Court in New York they reached a settlement with the defendant, Chase Bank. As per a court order signed by Judge Katherine Polk Failla dated March 10, the proceedings have now been discontinued.
The class action was first brought in April 2018, when Tucker complained Chase had charged him more than $160 in fees and interest for regularly purchasing cryptocurrencies from Coinbase using his credit card.
Tucker accused the bank of violating the Truth in Lending Act for not informing customers that crypto purchases were being treated as “cash advances,” which incur higher fees. He also complained the bank refused to refund the charges to affected customers.
“he complete lack of fair notice to Chases cardholders caused them to unknowingly incur millions of dollars in cash advance fees and sky-high interest charges on each and every crypto purchase,” reads the original complaint.
The bank did not charge similar fees for purchases made on debit cards.
Details of the settlement have not been disclosed. The plaintiffs have 75 days from the date of the court order to resume proceedings.
Chase Bank did not immediately respond to requests for comment.
Why Some Banks Dont Accept Bitcoin
It should be said that many banks view bitcoin and altcoinsas industry disruptors, a potential market anchor, or both. This stems from volatilityin the bitcoin market, which gave the banks cover to impose new regulations onbitcoin. This volatility is also what makes bitcoin purchasing by credit card sorisky for financial institutions since it is possible that these credit card purchasesmay not have enough future value to satisfy the repayment requirement.
But that doesnt mean there are no banks that accept bitcoin, or they havent tried to work around this or cash in on the bitcoin buying spree to enable them to accept bitcoin transactions. A recent statement from Coinbase revealed that the MCC for digital currency purchases was changed by a number of the major credit card networks that allow banks and card issuers to charge additional cash advance feeswhich could be as high as 23.99 percentand which arent charged or collected by Coinbase. These are separate from the exchanges transaction fees, which as being charged in conjunction with these fees.
The banks may also be swayed by speculation that the U.S. Congress is considering ways to regulate bitcoin sales. As recently as March 2020, Representative Paul Gosar introduced the Crypto-Currency Act of 2020, a bill that looks to provide not only clarity but legitimacy to crypto assets in the United States, a rep from Gosars office told the website, Cointelegraph.
Where To Buy Bitcoin With Credit Card Or Debit Card In The United States
Banks ban credit card crypto purchases
If you’re thinking of buying Bitcoin with your credit card, be aware that several banks in the US have banned their customers from using credit cards to buy cryptocurrency, including Bank of America, JP Morgan Chase, CitiBank, Capital One and Wells Fargo. Some banks that ban credit card purchases do still allow you to buy cryptocurrency with a bank-issued debit card.
Take a moment to review the exchange rate, fee and total cost of the transaction. If you’re happy with everything, click the Buy button to complete your purchase.
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Do Bitcoin Purchases Earn Credit Card Rewards
Buying cryptocurrency directly from a rewards credit card most likely wont earn credit card points or miles. The banks are very likely to classify these purchases as cash-like transactions.
Similar non-qualifying transactions include:
- Money orders
- Wire transfers
Speculative betting transactions like buying lottery tickets, casino gaming chips, and race track wagers also dont earn credit card rewards.
But, its possible to earn credit card rewards on non-crypto currency purchases. You can then redeem those rewards for bitcoin and altcoins.
The process can be more straightforward with a credit card or rewards debit card that a cryptocurrency exchange offers.
How Much Should I Expect To Pay To Purchase Bitcoin
Typically, the price to purchase bitcoin consists of a fee per trade plus the cost to convert a fiat currency, generally dollars, to bitcoin. The fee per trade is a function of the dollar amount of the trade. A higher trade amount will carry higher fees. The overall purchase cost also depends on features offered at the venue. For example, Robinhood does not currently offer an online wallet to store bitcoin. Therefore, you will need to budget for online wallet costs for your purchase.
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How To Buy Cryptocurrency At Cryptocurrency Exchanges
Cryptocurrency exchanges are online websites that let you exchange your local currency for cryptocurrency. Exchanges are the most popular way of buying cryptocurrency. I recommend newbies to use these exchange websites as they are easy-to-use and quick to set up.
Payment Method: Most of the exchanges accept payment by bank transfer or credit card, some of them also accept PayPal.
There are a lot of exchanges for you to choose from. Each one of them has different levels of security and they each accept different types of payment methods. Most exchanges will ask you to follow the steps below before you can start buying cryptocurrency.
- The first step is to register yourself with your information
- The next step is to verify your identityâ you normally need a passport/driving license
- Next, you are asked to set up 2-Step Verification. This helps to keep your account secure and keep the hackers away!
Note: Almost all exchanges charge a transaction fee of around 1-4%.
Once your account is set up, you can start buying cryptocurrency on the exchange. Most exchanges are just like stock-trading platforms: you can buy and hold your cryptocurrency, or you can exchange it for another cryptocurrency.
You must be careful when selecting the cryptocurrency exchange. You should make your decision based on the following factors:
So Then Whats The Best Place To Buy Cryptocurrency
There are more ways to buy cryptocurrency becoming available each year âit is a lot easier now to buy cryptocurrency than it used to be. In fact, most of the ways I have shown you in this guide are very simple if you follow our instructions.
But, which way is the best wayâ¦? Is it through broker exchanges like Coinbase? Through P2P websites like LocalBitcoins? Or is it simply by finding your local Bitcoin ATM?
Well, the truth is: it depends on your location and what you want/need.
If you donât live near a Bitcoin ATM, then itâs probably not the best place to buy a cryptocurrency for you.
Donât you want to use your ID? Then you might want to think about using a P2P website, like LocalBitcoins or LocalEthereum.
If using your ID isnât a problem for you and you want to buy cryptocurrency using an app on your phone, then Coinbase might the best place to buy a cryptocurrency for you.
It depends on you. I hope that this guide helped you to work out which way is the best way for you, and that you found our instructions simple and easy to follow. You should now have a good understanding of how to buy cryptocurrency. So, which way did you choose? Let us know!
Note: you should always speak to a financial advisor before making any major investments and never invest more than you can afford to lose.
Leave your honest feedback
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How To Buy Bitcoin
Investing in Bitcoin can seem complicated, but it is much easier when you break it down into steps. Investing or trading Bitcoin only requires an account at a service or an exchange, although further safe storage practices are recommended.
There are several things that aspiring Bitcoin investors need: a cryptocurrency exchange account, personal identification documents if you are using a Know Your Customer platform, a secure connection to the internet, and a method of payment. It is also recommended that you have your own personal wallet outside of the exchange account. Valid methods of payment using this path include bank accounts, debit cards, and credit cards. It is also possible to get Bitcoin at specialized ATMs and via P2P exchanges. Be aware, however, that Bitcoin ATMs have increasingly required government-issued IDs as of early 2020.
Alternative Ways To Buy Bitcoin
You can also now buy crypto through some digital payment platforms you may already have accounts with, like Venmo, PayPal, and Cash App, as well as the investment app Robinhood. But they might not be right for every investor.
Paypal and Venmo dont let you transfer your holdings into your own crypto wallet, meaning your private keys remain in the platform. Robinhood recently announced its creating a crypto wallet offering so customers can move their coins off-platform. But for crypto enthusiasts who believe in the common crypto mantra not your keys, not your coins, these platforms without the option to move your holding off-platform fall short. They can also charge high fees for buying and selling cryptocurrencies , so its worth comparing the prices youll pay to more traditional exchanges.
These apps can be a simple solution to buying Bitcoin, though. For beginners, using your Venmo or Cash App account to buy Bitcoin may be more accessible than an exchange like Coinbase or Gemini, and allow you to buy in while you learn more about investing in cryptocurrency. Just keep in mind that if you ever reached a point where you had a larger crypto position, these apps might limit your ability to transfer it to another platform.7
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Can I Buy Crypto With Chase Bank
As a customer of JPMorgan Chase Bank in the United States or Canada, you are not able to directly purchase Bitcoin or cryptocurrency through Chase Bank or the JP Morgan Chase trading application.
If you want to buy Bitcoin as a client of Chase Bank, you will need to use a cryptocurrency exchange in your country that connects with your Chase Bank account.
You May Have To Pay A Transaction Fee
The cryptocurrency exchange may charge a transaction fee when you use a credit card or a debit card to purchase cryptocurrency, which they will disclose to you at the time of your transaction. Using ACH takes a few days to post to your account, but its usually free. Youll have to make a choice between fast and expensive, or slow and free. Rushing to buy because you think prices may go up again may not be the wisest decision.
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Banks That Accept Bitcoin
|Royal Bank of Canada||Canada||See TDB. We recognize that regulatory, risk and other external environmental factors relating to cryptocurrency continues to evolve, RBC spokesman AJ Goodman said to Bloomberg. As such, we continue to review our policies to consider how we can best support clients.|
|Toronto-Dominion Bank||Canada||Despite moves to the contrary from American banks, Canadas largest banks are supporting altcoin credit card purchasesas long as the purchase is accepted by Mastercard, Visa, Visa debit, or Interac. This may change shortly, however.|
Now that youre clear on which banks accept bitcoin, get started making the most of your Crypto.
How To Buy Bitcoin And Ether P2p
This is one of the simplest ways to buy cryptocurrency! Peer-to-peer exchanges remove the middleman and allow users to buy and sell cryptocurrency from each other directly.
Imagine this: John is interested in crypto and wants to buy some Ether. John could go to Coinbase and buy it from there, but he’d have to use his identity. Amy wants to sell some Ether but doesn’t want to use Coinbase because she doesn’t want to pay any fees.
What if John could just buy the Ether from Amy? That would solve everything! Well, thanks to P2P exchanges, he can! Using a peer-to-peer exchange, John and Amy can avoid the fees and they don’t have to share their identities.
Pretty cool, right?
Letâs look at how to buy and sell cryptocurrency on a peer-to-peer exchange with step-by-step instructions:
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Deposit Funds Via Credit Card
In this step, you can eventually transfer some funds to your brokerage account. eToro offers multiple payment methods bank credit cards, wire transfers, and several e-wallets. There are no deposit fees for all of these methods, but eToro takes low conversion fees for non-USD transfers. To deposit funds, click on the Deposit Funds button, choose the credit card option, fill in your card details and the amount you want to deposit.
Cash Advance Penalties From The Card Issuer
Your credit card issuer is likely to consider the crypto purchase a cash advance, as if you used your credit card to take money out of an ATM terminal.
Thats bad for you because it probably comes with these downsides:
Cash advance fee. This is a one-time fee charged when you take your advance, usually 3% to 5% of the amount. For example, if you take out a $200 cash advance, a fee of $6 to $10 will be tacked on to your account balance.
Higher interest rate. Many cards charge a higher annual percentage rate for cash advances than for regular purchases.
No grace period. If you pay your balance in full monthly, your credit card usually gives you a grace period of at least 20 days to pay off your purchase before youre charged interest. Cash advances, though, start to accrue interest from day one.
Lower credit limit. Some credit cards have a separate cash advance credit limit, which is lower than the overall credit limit.
No credit card rewards. If your credit card issuer considers a crypto purchase a cash equivalent, your spending probably doesnt qualify for rewards, such as cash back, travel points or miles. Similarly, it wont count toward your required spending to earn a sign-up bonus.
Again, it depends on the issuer of the card whether a cryptocurrency purchase is considered a cash advance. Before making a purchase, its a good idea to call the number on the back of your card and ask.
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How To Store Bitcoin On A Digital Wallet
Cryptocurrencies are primarily stored in digital wallets that are specially designed for this purpose. These are decentralized apps or physical devices that provide a safe place for your coins and are almost impossible to hack.
So, when you buy bitcoin as a long-term investment, its not secure to leave them on your exchange account. Instead, you had better build your personal crypto wallet and transfer your coins into it. You can find more information about how to create a bitcoin wallet in our guide, Best 5 Bitcoin Wallets.
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Buy Bitcoin With A Credit Card Through Localbitcoins
Pros: Wide variety of sellers, easy-to-use interface
Cons: Sellers will usually take higher fees for credit card purchases, possibility of scam
LocalBitcoins is a peer-to-peer marketplace for buying and selling Bitcoins. You can think of it as eBay for Bitcoin. The site offers a wide variety of sellers that accept various payment methods, including credit cards. The main issue when using LocalBitcoins is that you have to filter sellers wisely so that you wont get scammed. One thing to keep in mind is that if youre new to LocalBitcoins, not a lot of sellers will want to do business with you since theyre likely afraid of scammers as well.
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S To Buying Bitcoin With A Credit Card
The most simple way to acquire Bitcoin with a credit card is on a cryptocurrency exchange of your choice. There are three steps for buying BTC on an exchange, and these steps are generally the same no matter which platform you pick.
1. Create an Account: Depending on the platform that you use to buy Bitcoin, you will first need to sign up for an account. If an account is required to buy Bitcoin with a credit card, you will also need to pass the platform’s KYC requirements.
2. Set Up Wallet: Before purchasing Bitcoin, it is best practice to create a personal crypto wallet. Many exchanges allow you to keep digital assets on the platform however, this is generally considered less safe. If you don’t own a wallet yet, check out our list of top options.
3. Purchase with a Credit Card: : Once you’ve passed KYC, and have set up a personal wallet, you are now free to purchase Bitcoin with a credit card. This process is relatively simple, and similar to completing an online order on any ecommerce website.
Most interfaces have the same two inputs. The amount you want to buy, and the asset you wish to purchase. First select Bitcoin as the coin you wish to purchase. Then, enter the amount of Bitcoin or the equivalent fiat value.
If you are using a platform that requires you to send Bitcoin to a personal cryptocurrency wallet, enter your personal Bitcoin address now.