Trading cryptos using these services will cost you 10% more than before.
Bitcoin and almost every other cryptocurrency crashed hard today and the whole week. The year 2018 seem to put a full stop on Bitcoin, as it dropped below $6,500 today, going all the way back to $1,000 where it started its epic bull run. The wave of negative news against cryptos was already on the rise, and now two of the globally renowned credit card companies have made it, even more, harder to trade cryptocurrencies.
Last week investors of cryptos started noticing additional fees on their bank statements for cryptocurrency trading, as reported by TechCrunch. According to the sources, both Mastercard and VISA have changed the way cryptocurrency purchases are processed on their networks.
Related: Mastercard filed a patent for instant blockchain payments solution
Previously, most people who purchase cryptocurrency using a credit or debit card were charged the standard 4% transaction fee. As of now, the customers will have to pay additional 5% fee to a credit card provider as well as 4% service fee to the crypto exchange. Furthermore, all the transactions aimed at making cryptocurrency purchase are deemed as a “cash advance” rather than a “purchase” on both platforms.
As the cash advances do not come under standard interest-free grace period that consumers expect for other credit card purchases. In addition, for daily based crypto transactions, the interest rate for cash advances is also higher forming 25.99% per transaction. As a result, the overall charges applied to any crypto purchase using a credit card will conclude a total of 10% as an interest.
The current doings of VISA and Mastercard seems like an attempt of complicating investment process of cryptocurrencies, which are already having a hard time, citing strict regulations in major markets.