A Simple Guide to Getting Maximum Value from Your Credit Cards

Sometimes, the simplest questions are just perfect.

How do people even use credit cards without messing everything up?

A reader we’ll call Jean sent that to me at the start of a question for the reader mailbag. Afterwards, Jean offered up a pretty typical story of credit card use: relying on it for purchases, gently inflating one’s lifestyle, losing track of what’s actually going onto the card, and suddenly facing big bills.

Jean isn’t alone. In America, 38.1% of households carry some kind of credit card debt and the average credit card debt for a family carrying a balance is a whopping $16,048. That’s approximately four months of take-home pay for the average American family, and given the average interest rate of just over 15%, the average American household will be paying approximately $640 a month for the next fourteen years to get rid of that debt.

Many, many articles and books have been written about how to get rid of a mountain of credit card debt. Here’s my own guide to building a debt repayment plan, for starters.

However, not as many articles focus on using credit cards smartly and effectively to get maximum value out of them. Why? It’s much easier to simply advise people to just not use credit cards at all. After all, we can live without them – you can use your debit card for most purchases and living within your means is a lot easier if you’re just using your checking account.

This brings us right back to Jean’s question. How do people even use credit cards without messing everything up?

Many years back, I racked up quite a lot of credit card debt, and in the following years, I’ve paid it all off. I currently make most of my purchases with a credit card and I haven’t carried a balance in many years (aside from a couple mistakes due to automatic bill pay shenanigans that I should have been watching more carefully and corrected as soon as I found them). I use a credit card many times per month and I have not actively carried a balance in several years.

How do I do that? Here are the “secrets” of getting maximum value from credit cards.

First and foremost, if you think to yourself, “I can’t afford this, but I could put it on the card,” then you shouldn’t be buying that item. Credit cards are not “free money you can pay back later,” so don’t treat them like that. This is absolutely the first rule of smart credit card use. They’re not free money. Don’t think of them as free money. They are not a tool to leverage purchases you wouldn’t otherwise be able to afford. Period.

If the purchase you’re considering is an absolute need, then you’ve either made some other spending mistakes to put yourself in that position or you’re walking such a tight financial rope that you need to be considering some significant life changes outside of credit card use, such as cutting some major expenses (like moving somewhere cheaper or eliminating a car) or getting a better job or an additional one. Credit cards should not finance your lifestyle, ever. If you buy things on your card that you can’t pay out of pocket, you will wind up in a financial mess.

The challenge with credit cards is that it can be very easy to disconnect the money in your checking account from the expenses you put onto that card because the impact of that expense doesn’t show up in your checking account immediately. If you buy something with a debit card, your checking account balance goes down immediately. On the other hand, if you buy something with a credit card, you have the item and your checking account balance doesn’t change.

This creates a disconnection problem. It can give a strong sense that the item or experience that you bought with the credit card was somehow “free,” which somewhat disconnects you from the actual expense of things. At the same time, it makes a credit card bill feel very separated from the actual things you bought to incur that bill. Rather than feeling like you’re paying back Amazon for the thing they already shipped to you, it can feel like Amazon gave you that item and you’re actually paying Chase for the privilege of using a card, which can feel frustrating and meaningless. No one relishes writing a check to the bank.

Most successful credit card users figure out some way to bridge that disconnect, and there are a lot of tools for doing this.

Start with separating “needs” and “wants.” Many people stumble at this step by either not bothering at all or by not really thinking about it. The point of this is to really assess the money you spend on needs so you can see how much is actually left for wants and then base your spending going forward on that.

The trick is knowing how to separate the two. For example, most groceries probably fall under “needs,” but eating out falls under a “want.” Housing falls under a “need” unless you can obviously and easily move to somewhere cheaper, in which case part of your housing cost is a “want.” If you commute, a basic car is a “need,” but an expensive car is mostly a “want.” Netflix is a “want.” Cable television is a “want.” Soda is a “want.” Alcohol is a “want.” Unless you work from home and it’s necessary, internet is a “want.”

Why is this distinction so important? Most people really don’t recognize how much money per month they spend on “wants.” They just get used to unnecessary expenses and, in their mind, gradually begin to shift things like eating out into the “needs” category and allow their “wants” to keep inflating. When you never step back and look at how much of your monthly expenses are made up of “wants,” you never really see how rich and full your life really is.

Go through your bank statement and credit card bill for the last month and separate everything into “needs” and “wants.” One good way to do this is to use a pink highlighter for “needs” and a blue one for things that are mixed; leave “wants” blank. Go on, do this, and then come back. I’ll wait.

You probably noticed that there are a TON of things on there that are “wants” when you’re honest with yourself and many more are mixed bags. There are likely few expenses on there that are truly “needs.”

Now, spend a minute and go through all of those “wants.” Think about how much you actually spend on just adding a bit of momentary pleasure to your life. Meals eaten out. Cable. Internet. A bigger house than you need. A nice car. Alcohol. Snacks. Entertainment items. Excess clothes. Premium household items. On and on and on.

The purpose of this little experiment isn’t to point out that you’re overspending, but that you already have an incredibly rich life, probably one in which you don’t have nearly enough time to follow up on all of the pleasures already available to you. How many series and movies are in your Netflix queue? How many unread books are on your shelves? How many barely-worn items of clothing are jammed into your closet? How many cool projects are stowed away somewhere? How many things have you wanted to do and bought the stuff for, but then realized you just didn’t have the time?

What does this have to do with credit card use? It’s simple. It is very hard to use a credit card effectively if you truly believe you don’t have “enough” in your life already and that you really need or deserve “more” to feel happy. If the idea of simply putting a cap on all of these pleasures in your life seems difficult or hard or deeply unappealing, then it is going to be very hard to use a credit card responsibly.

If that describes your feeling about life, ditch the credit cards for a while. A credit card in the hands of someone with those kinds of feelings about their life is a dangerous tool, indeed. It’s basically a recipe for consumer debt.

If you can see the abundance that your life already has to offer, the next step is to put a firm limit around those wants. Cut back on some of those wants that come in the form of a monthly bill if possible, and then put some caps on your spending on those other things. Eat out a little less frequently and maybe at cheaper places. Stay in for movie night a couple nights a month instead of going out.

The strategy that has truly worked well for me is to put a strong cap on all of my incidental spending each month. If I’m buying something that isn’t necessary and isn’t directly discussed with my wife, it counts toward my monthly “hobby spending” limit. I track this by keeping a running tally in my pocket notebook – if it’s an incidental purchase, I either write it down immediately or stick the receipt in there to write down later. If I slip up and “go over” for the month, then I carry it forward to next month.

Everyone’s budget is different, so I won’t set a specific dollar amount for you. Some people have rent, others have a mortgage, and others own their home. Some people are facing car payments, while others are not. Some people are pushing hard for their savings goals, while others have them a little more on the back burner. Some are paying off student loans, while others are not. Some live in a high cost of living area, while others live in a low cost of living area.

The only rule that applies here is to give yourself enough so that it feels like breathing room and freedom, but not enough that you’re going to continue down a path of financial trouble.

The real goal here isn’t the limit. The real goal is to make you stop and think about your non-essential purchases and ask yourself whether they really add value to your life. Every single time you pull out that credit card, that question should be on your mind. “Does this really add value to my life? Does it add enough value to be a part of that incidental spending limit for the month?”

This is the single most important thing you can do when it comes to credit card use. Be mindful of everything you put on there and set some reasonable limits for yourself so that you don’t inadvertently overspend. If you do that, you’ll avoid the vast majority of credit card problems.

In the end, the best way to get maximum value out of your credit card is to exhibit self control. If you’re purchasing more than you can afford with the aid of a credit card, eventually you’re going to be facing down a mountain of debt with hundreds of dollars of interest accrued per month.

If you’re consistently spending within your means, you’ll soon reach a point where there is always more than enough in your checking account to pay off your credit card in full each month – and that’s exactly what you should do.

Another thing worth considering is choosing the right credit card. In general, it’s not all that useful to have lots of different credit cards, because you’re adding management effort and identity theft risk with every card you add. (There are some strategies that involve using lots of credit cards, but that’s a separate topic entirely and it’s a strategy that can easily backfire if not played carefully.) Instead, it’s a good idea to just have one or perhaps two cards that are carefully chosen to maximize value.

The most effective way to do that is to choose a card or pair of cards that offers you maximum benefit for the retailer(s) you use the most while still offering some benefit elsewhere. In other words, you want a Visa or MasterCard or American Express card that you can use at other locations besides your primary retailer, but the card offers really strong benefits associated with that retailer.

Cards like this are generally not listed among the “best” credit cards because, frankly, they’re hard to evaluate and they’re different for each person. Cards that are mentioned among the “best” cards are the ones that offer the best benefits without association with a particular retailer, but if you do a large portion of your shopping through a single retailer or two, a card associated with that retailer is going to be a tremendous bargain.

Let’s say, for example, that you shop at Target quite frequently, doing your grocery shopping and household shopping there. The Target REDCard Mastercard gives you 5% off all of your purchases there. A Costco credit card gives you 4% off all gas bought at Costco and 2% off of all other purchases there (and 3% off of restaurants and other specific purchases), so if you buy gas at Costco, it’s pretty hard to beat that for a fee-free card, especially if you commute. If you shop on Amazon a lot for household supplies and nonperishable foods and have an Amazon Prime account, the Amazon Visa gives you 5% back on all of your Amazon purchases in the form of Amazon credit.

Those discounts are really hard to beat in terms of a general purpose card. You can beat them with some introductory offers if you jump through lots of hoops, but those introductory offers rarely translate into lasting benefits.

What if you can’t clearly name a preferred retailer? If that’s the case, then one of the best rewards credit cards makes sense.

What about APR? Here’s the thing – if you are using a credit card effectively and getting maximum value from it, the interest rate does not matter because you’ll never be paying it. Interest rates on credit cards only matter if you carry a balance from month to month, and if you’re carrying a balance from month to month, you’re already not getting the maximum value from your credit card.

In summary, the cornerstones of successful credit card use are mastering where your money goes, consciously limiting non-essential spending, using a sensible card, and paying it off in full each month. If any of those cornerstones fail, then you aren’t getting maximum value out of using a credit card. If multiple ones fail, then you’re better off using your checking account and debit card to pay for your expenditures, because your credit card is definitely costing you money.


Maxing out: time to put the credit card away

Maxing out a credit card

I am a big fan of the Arthurian legends and have read various interpretations over the years.

However, there is always that time when the proud King is going to be betrayed and he is going to go into his last battle and although you know that it is going to happen, there is nothing you, the reader, can do to stop it from happening.

The global economy appears like this at the moment. Like the slow-motion of a car crash, we can only look on in horror as the world approaches the buffers.

David Cameron made a telling point to the Canadian parliament this week when he pointed out that this is not an ordinary cyclical recession. Too right it’s not, mainly because we never really left the last one. Since 2008 we have been limping along, hoping that our numbers come up and we can head to the uplands.

Despite the self-congratulations of policy makers two years ago, we are back where we started where the money markets are beginning to shut themselves down to banks with heavy sovereign debt burdens, global growth is stagnating and even China seems to have reached its peak in terms of economic activity.

We are, in the words of the World Bank’s chief Robert Zoellick , in the danger zone.

But what are we going to do?

Cameron told the Canadian parliament that “it’s a debt crisis”. And debt is a problem.

In Canada, the politicians hit the debt problem during the boom times and so led to the state of the nation today where they have a more than ample war chest to offset the hazards that are on the horizon.

Essentially, Canada paid off its credit card and stuck it in a drawer and has vowed not to take it out unless absolutely necessary.

In Greece, the debate is whether to borrow even more money to service the credit card whilst being given a diet of broth and hard labour or to declare bankruptcy and start again with creditors impatiently waiting for it to earn enough money to begin to pay back its debt – if it pays it back at all.

Here in the UK we are in a half-way house where we know that we should be paying back the debt but our family keeps demanding new shoes so we pay a little back, spend a little more and hope to inherit some money.

America? Well, America appears to be magicking up new credit cards whenever it hits its limit.

Let me make it clear to you – if you run up a credit card, max it to the hilt, do you keep spending and hang with the repayments bill or do you cut back on your spending and try and clear the debt?

Many complain that we must spend our way out of recession but if we just keep driving up that credit card, eventually, like some European banks are finding out, the credit will stop and where will we be then?

Now, there is a risk that we will be forced into some speculative spending. But instead of some Roosevelt public spending plan, why not a tax cut? If we are going to have to use that credit card again to stimulate the economy, put that stimulus into the producers. Yes there is a risk that people will just hoard the bonus but that is what the banks did with the bailouts and at least the money will be with the private individual rather than a further expansion of the state.

On an aside, I quite liked the idea of instead of bailing out the banks, we should have just given each taxpayer £300 ,000 to put towards a house. Mad, but amusing and possibly effective at the same time.

At least for the moment, we in the UK are not getting more credit cards. Quantitative easing (QE) is only effective in a short spell. The QE program that the Americans embarked on has had zero effect on its economic problems and may indeed have exacerbated them with doses of inflation and unemployment.

To me, the idea of QE being an effective way of managing your way out of debt is about as useful as giving a drunk a shot of whisky so they can make it to the next pub.

There is a further problem to contend with in our current situation. Uncertainty.

The markets are marking themselves to the situation at hand which is one of sheer uncertainty. We are unsure of what the eurozone is actually going to do next. With briefings and counter-briefings flying all over the place, the markets reflect this, hence the volatility.

Whichever decisions the eurozone makes, it will have to be clear and unambiguous. Whichever way they go, the markets will act in the appropriate manner but at the moment the markets are just unsure about whether Germany is going to take away Greece’s credit card or pay it off.


5 Spending Traps I Now Avoid After Maxing Out My Credit Card At 20

Maxing out a credit card

Yes, you read the title right. Just in the midst of my college career, my credit score took the biggest plunge, and consequently, so did my self-esteem.

After that catastrophe, it took me almost a full year to even be able to begin paying off my outstanding balance in full each month. There were, of course, a few things that especially led me down my path of unhealthy spending habits. Here are five spending areas I would suggest steering clear of if you want to avoid a financial crisis like mine.

1. Delete the Starbucks and Favor app. It is a trap.

Let#8217;s talk about the Starbucks app. I didn’t realize how much I was spending on Starbucks until I noticed I had to hit the “reload $25” button on my app every few days. If you can get out of your unhealthy caffeine addiction sooner, and realize the beautiful wonders water can do for your face and overall health, you’ll definitely save your money for better (and bigger) investments.

Additionally, apps such as Favor or Postmates that deliver food to you may sound amazing when you’re in the middle of a study session in the library, learning about cost-pull and demand-pull inflation, but trust me when I say you really need to stop being lazy. If you have these apps, you probably know how addicting they can be. So do your wallet a favor, and delete them #8212; you’ll thank me later!

2. The fashion police won’t stop you. It’s okay to be an outfit repeater.

Remember when Kate Sanders told Lizzie McGuire she was an outfit repeater? I blame that integral television moment for my actual fear of being an outfit repeater — specifically when it comes to dresses. In my University, towards the end of every semester, it would be formals season. I would go online looking for affordable dresses at online boutiques such as Lulu’s, Tobi, etc. I didn’t have time to just go to the mall when I had to juggle all my classes and organizations I was involved in. And you know what? Online shopping can be addicting. Those dresses I got were beautiful, but the shipping fees that came with them were not. Spoiler alert: It’s okay to wear the same dress twice. Maybe even swap with your friends. I promise Kate Sanders won’t find you, and if she does, you can always call her an outfit rememberer.

3. Stop buying furniture and decor you don’t need.

I wanted my college apartment to look like those lavish, fun ones on Pinterest. Who doesn’t want their apartment to look cute and inviting? But let’s be real. You’re only in college for a few years, and you’ll most likely move out of your living situation soon after graduation. While you need furniture that is sturdy, you don’t need geometric accent decorations from Urban Outfitters that you definitely could’ve made yourself.

4. Don’t spend money at the same rate your friends do.

Unfortunately, it took me some time to realize that some of my friends actually came from wealthy households. For some reason, just living in the same neighborhood as them made me assume we all came from the same range of social backgrounds. When I started paying more attention to my friends#8217; spending habits, I eventually figured out that that wasn#8217;t the case at all.

It’s definitely okay to opt to stay home instead of hanging out with all your friends when they can spend money you don’t have. I noticed some of my friends were able to live off of eating at fast food chains and restaurants and never cook for themselves. I don’t know how I was able to eat Chick-fil-A every day for months. It’s upsetting not getting the lucky receipt with the “one free Chick-fil-A sandwich after doing an online survey,” but it was even more upsetting realizing I would have saved hundreds if I had just learned to cook my own meals sooner.

5. Not every experience is worth dropping money for.

I don’t know about yours, but how are all my friends constantly going out of the country and taking the most beautiful, Instagram-worthy pictures? Some experiences are definitely life-changing. I never thought I would go to music festivals five years ago, but I went to some, and they were amazing. It’s good to be open-minded, and experience new places with your friends.

However, be mindful of how much you’re spending. The costs add up, between hotels, food, and tickets. It’s okay to miss out on some experiences, because you can look at missing out as saving for even better ones in the future.

Bea is a senior Economics major at the University of Texas at Austin. She is trying to use her knowledge to help others achieve their financial goals.

Free tip. Stop writing such idiotic and facile posts. You are spending like a well-paid working professional, not a student. Buy your furniture at Salvation Army. Eat Ramen. Throw out your credit cards #8211; clearly you#8217;re not bright enough to manage money (ironic you#8217;re an Economics major #8211; think you should switch to Home Econ#8230;)

I don#8217;t think being an Economics major teaches you how to spend your money. You#8217;re spiteful and your negative comment adds to nothing. I think the writer acknowledged her bad spending habits after a while. I think that#8217;s what happens to most of us when we neglect our bad habits.

The writer is here to share their experience and help others, and you#8217;re here being spiteful and adding nothing to this conversation. I think many people make mistakes especially when they are young, and we learn from them. That is the whole point of TFD.

Also, I don#8217;t think it#8217;s wise to just #8220;throw out your credit cards#8221; . Clearly you know nothing how to manage cards. Good day to you, #8220;disqust101#8221;.

Free tip: don#8217;t waste your time and our time telling someone not to write things on a website. There#8217;s this little x at the corner of the tab that allows you to leave any article you don#8217;t enjoy reading.

I really like this article! Thank you for giving us your insight. You had humor and I really loved this relevant reading!

I can understand the whole thing about dresses. It#8217;s hard! Especially when you post pictures on Instagram and Facebook. My pledge sisters and I would share dresses to save money. I think it#8217;s ridiculous that dresses are expensive for just a one time wear. I regret lavishly spending on them when I would only wear them to one event #8211; I totally relate to you there. I LOVED how you related this to Lizzie McGuire, that gave me a good laugh.

Also, I almost maxed out my credit card when I was young too. It#8217;s hard when things just start to add up. I would spend a lot when it came to food because I didn#8217;t know how to manage my time to be able to cook meals. I also didn#8217;t want to just eat fast food because I knew it was unhealthy.

Thank you so much for sharing this article! I really appreciate that The Financial Diet includes a lot of different voices. It#8217;s good to have serious topics, but it#8217;s also even better when we can look back and write about our mistakes in a new light.

I never understood the thing about outfits. When I find something that really fits, feels comfortable and looks good on me, I#8217;ll wear it again and again. Combine it with different things. And never got a single negative comment about #8220;repeating outfits#8221;.


Should You Increase Your Credit Card Limit?

If you#8217;re thinking about requesting an increase to your credit card limit, start by evaluating why you want to do so. While increasing your limit gives you access to additional credit, there are also times when a credit card limit increase would not necessarily be beneficial.

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Maxing out a credit card

Increasing Your Credit Card Limit to Reduce Your Credit Utilization Ratio

If the total amount of credit you#8217;re using is approaching your total credit limit, your credit score could suffer. This is because your credit utilization ratio — your overall credit balance relative to your total credit limit typically is an important part of your credit score.

A higher credit utilization ratio may have a negative impact on your score, as it suggests to the issuer you may be close to maxing out your credit cards. For example, your income may have grown and, simultaneously, your monthly expenses have risen, therefore the current credit limits on your cards may accommodate this increased cost of living as well as before. In this case, increasing your card limit may prevent your credit utilization ratio from creeping up. To estimate your credit utilization, use an online credit card limit calculator that includes the balances and limits for all of your credit cards.

Additional reasons to increase your limit may include:

  • Access to credit for emergency situations
  • Opportunity to earn additional rewards on credit card purchases
  • Simplify making larger purchases such as vacations, furniture or home renovation 1

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Reasons to Not Increase a Credit Card Limit

A higher credit card limit could potentially lead you into taking on too much debt, which could impact your future loan or mortgage applications negatively. For instance, banks or issuers will decline applications for new loans if your income can#8217;t support your existing debt plus the loan or mortgage payment you#8217;re applying for.

A credit card company will have to check your credit with a #8220;hard#8221; credit inquiry when you ask to increase a credit card limit, and hard credit inquiries can impact your credit score. Weigh this carefully against the benefits of a higher limit. 2

Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.


27 Exchanges for Buying Bitcoins with Credit Card (2017 Updated)

Table of Contents

As 2017 begins it seems easier than ever to buy Bitcoins with your credit card. The only issue is knowing from who to buy. In this post I#8217;ll cover all known (legit) methods to buy Bitcoin with a credit card.

Just for general knowledge, the reason that buy Bitcoins with a credit card isn#8217;t available all around is due to chargeback issues that most sellers wish to avoid (for a detailed explanation look here). So many exchanges need to protect themselves in order to offer this service and not all of them have the technology to do so.

Before I explain the different methods one word of warning. NEVER leave your Bitcoins at an exchange or a website. Once you purchase Bitcoins from any of the methods explained below move them into your Bitcoin wallet immediately. If you still don#8217;t have a Bitcoin wallet you can compare the different wallets here. So make sure to get this step out of the way before buying your Bitcoins.

Buy Bitcoins with a Credit Card at Coinbase

Cons: Not available worldwide, Support takes time to respond

Coinbase is the largest Bitcoin broker worldwide. It allows users to buy up to $150/week of Bitcoins via a credit card or debit card. Coinbase charges a 3.75% convince fee on all credit card transactions and is open to 33 countries around the world. When buying more than $100 of Bitcoins you will receive an additional $10 Bitcoin bonus.

Quick guide - How to buy Bitcoins with a credit card on Coinbase

Maxing out a credit card

  1. Create a Coinbase account
  2. Go to settings - Payment methods and click add payment method
  3. Click credit/debit card
  4. Enter your cards information
  5. Once the card is confirmed you can go to buy/sell and buy your Bitcoins
  6. The Bitcoin will be sent to your Coinbase wallet

Maxing out a credit card

Debit card purchases are free of charge but credit card purchases of Bitcoin will be charged an additional 3.75% processing fee. In order to connect your card you will need to verify your id by uploading a government issued id. After verification you can instantly buy Bitcoins with your credit card on Coinbase.

Buy Bitcoins with a Credit Card at CoinMama

Pros: Good support, respectable company, fast service

Cons: Limited states in the US

CoinMama specializes in Bitcoin purchases through a credit card. They take a premium fee for their services but they do not limit you to a maximum amount of Bitcoins that you can buy. You can buy up to $150 worth of Bitcoin without verification (verified accounts can buy $5000/daily and up to $20000/month).

From Coinmama's homepage you can choose how many Bitcoins you'd like to buy / sell. You can enter the price either in BTC or in USD or choose one of the offered packages.

Maxing out a credit card

Once finished, click buy Bitcoins and you will be taken to the sign up page. After you fill out your initial details you will need to go through additional verification by submitting a photo ID document. Verification is usually pretty quick (it took me 1.5 hours to get verified). You can also buy up to $500 without doing the verification process. With verification you can buy $1000/daily and up to $5000/month.

Once verified you can buy Bitcoins pretty easily with your credit card through the simple interface. If you verified your address I suggest you use Visa, Mastercard via Simplex since it's the fastest option. If you want to continue without verification you can use the MoneyGram option. You can then pay the amount with your credit card on MoneyGram's website (this is applicable to US residents only).

Maxing out a credit card

The next step will be to enter your own Bitcoin address. Unlike other exchanges CoinMama doesn't keep your Bitcoins on their wallet (which is a good thing). This means you'll need to get a Bitcoin wallet before continuing.

The last step will be to enter your payment details and place your order.

Coinmama uses the services of Simplex allowing merchants to sell Bitcoins via credit cards as a payment method. I'll probably be doing a more in-depth review of Coinmama soon as it has become quite a popular method for buying Bitcoins.

Buy Bitcoins with a credit card through CEX.IO

Pros: Reputable company, high buying limits

Cons: Limited countries available, higher exchange rates

There is an option to buy Bitcoins using your credit card at the CEX.IO bitcoin exchange. Established in 2013 as the first cloud mining provider, CEX.IO has become a multi-functional cryptocurrency exchange, trusted by over 450,000 users. CEX.io works in the United States, Europe, and some countries in South America.

After opening an account just click on Wallet and Fund next to the request currency. You will then have the option to either wire transfer the money or use your credit card to get your Bitcoins instantly

Cex.io also offer instant withdrawals of USD, EUR, and RUB to payment cards.This means you can deposit and withdraw funds in and from your payment cards once they are linked to your CEX.IO profile.

Withdrawal requests are processed automatically, right after their placement, and you do not need to log in to third party services. In most cases, withdrawals are processed instantly, and this will enable you to gain convenient access to withdrawn funds on your Visa/MasterCard right away.

Buy Bitcoin with a Credit Card at Coinhouse

Pros: Reputable company, high buying limits

Cons: Limited countries available, higher exchange rates

Coinhouse is the House of Bitcoin in Paris. You can buy bitcoins directly online by Visa / MasterCard or cash with Neosurf prepaid card available in most European countries.

Maxing out a credit card

After confirming your account and confirming your identity you will be able to purchase up to 2,000 euros in bitcoin a day, to a maximum of 10,000 euros per month. The delivery of Bitcoins is immediate after confirmation of payment.

Buy Bitcoins with a credit card through Bitpanda

Pros: Multiple payment options, relatively low fees

Cons: Fees are hidden inside the exchange rate, EU citiznes only

Bitpanda is an Austrian Start-Up Company that was founded in October 2014. The company allows you to buy Bitcoins or Ethereum with a credit card as well as with Wire transfers, Neteller, Skrill, SEPA and more. The company supplies its services to European countries only with a relatively low fee.

If your account is verified the limit is 2,500€ daily (75,000€ monthly) for credit card purchases. For other options, there’s a 10,000€ daily (300,000€ monthly).

Buy Bitcoins with a credit card through Bitstamp

Pros: Great reputation, multiple payment options, accepts customer worldwide

Cons: Average fees, verification process can take a long time, not very user friendly

Established in 2011, Bitstamp is one of the most reputable and oldest Bitcoin exchanges. The exchange is fully licensed by the Luxembourg ministry of finance. Bistamp started accepting credit card purchases recently via Simplex (the same company the supplies services to Coinmama). At the moment this service is open to most European and US citizens.

Buy Bitcoins with a Credit Card Through VirWox

Pros: No verification needed, available worldwide

Cons: High fees, poor support

Virwox is a virtual currency exchange set up on late 2007 for the purpose of trading Second Life Lindens (SLL) and other virtual currencies used in online gaming.

Currencies traded other than Linden Dollars include Avination’s C$, and the Open Metaverse Currency (OMC). In April 2011, VirWoX started accepting Bitcoin and basically opened a loophole for people to buy Bitcoins with Paypal by first purchasing SLL via Paypal and then converting that SLL to Bitcoins. As of writing this post the site has over 740K registered users.

Virwox's option is less intuitive than Coin.mx and has more fees. However it is possible to get you Bitcoins within 48 using this method.

Because of chargeback risk Virwox is taking on themselves they are limiting the amount you can deposit initially through Paypal or a credit card, here are the exact limits according to their website from April 30th 2015.

The first thing you'd want to do is go to VirWox. VirWox is a Virtual World Exchange which was originally setup to trade Second Life Lindens - a virtual currency also known as SLL. We are going to use VirWox as a mediator in order to purchase Bitcoins with a credit card since most places won't allow you to do this as I've mentioned in the beginning of the post.

So After you've entered VirWox you're going to need to sign up. There's a link on the top left that says Not registered yet ?. You can see it here:

Then all you need to do is to fill out your personal details. Where it says Avatar Name you can just leave it at No Avatar. The Avatar is taken from the game Second Life and we don't really need to link anything here.

Once you've entered all of your information you can just click Register. The next thing that will happen is that you will get an email from VirWox with your temporary password. I strongly advise you to change that password since you will be transferring money through this site.

Once you get that email just log into VirWox with your username and password. The first thing you will need to do now is to deposit some money into your account. Just click on the Deposit link on the left side and go to the PayPal Express Checkout section. There you can choose how much money you would like to deposit.

Note that there is a max amount of money you can deposit, but it will go up as soon as time goes by (the exact amounts are stated on VirWox's homepage). So after you enter the amount you want to deposit just click the PayPal button.

You will now move on to the PayPal payment page. If you have a PayPal account you can just log into it and make the payment. If however you don't have an account and want to pay with a credit card you can just click the link Don't have a PayPal account ?.

Maxing out a credit card

Once you click that link you can just enter your credit card information and buy deposit money to VirWox with your credit card.

Maxing out a credit card

After you deposit the money it will show on the top left side in VirWox on your USD balance. Now it's time to buy some Bitcoins. The first step you'd be doing is buying SLL with your USD. Just go to the SLL/USD and select how many SLL you want to buy according to the current conversion rate.

Maxing out a credit card

In the picture above I don't have enough USD to buy SLL but if you've followed the steps correctly so far you'd see the amount of SLL you can buy with your USD.

After you've bought SLL they will also show up in the top left side (you can see mine on the top left in the former picture). And now it's time to exchange these SLLs into BTC. So go to the SLL/BTC exchange and just exchange as many SLLs as you'd like.

Maxing out a credit card

After you'll exchange them you will see the Bitcoins showing up in your account on the top left as well. The last step that's left is to withdraw the Bitcoins into our wallet. So just click on Withdraw on the left side and you will be able to enter a Bitcoin address that you can send your newly acquired Bitcoins to.

After the transaction will be approve (this can take up to 48 hours but usually takes around 2) you will see the Bitcoins in your wallet.

Buy bitcoins with a credit card via IndaCoin

Pros: Good support, available worldwide

Cons: High fees, not enough reputation yet

Indacoin is a UK based exchange which allows users worldwide to buy Bitcoins with a credit card. The minimum amount is $5 and limit for the first month is $500. After 40 days of the card using monthly limit will be increased to $ 3,000.

Maxing out a credit card

In order to use your card you will need your 5 digit code which is on your credit card statement and to verify you phone number. The process is seems fairly simple however I have not tried this exchange out myself so I can not vouch for it.

Even though the site states that they do now charge any fees, their exchange rate is pretty high due to credit card processing. At the time of writing this post 1 Bitcoin is sold for around $297 while the Bitstamp exchange rate is $245. Such a premium is considered high even for credit card payments.

Buy Bitcoins with a credit card through 247Excahnge

Pros: Good support, available worldwide

Cons: Requires verification, high exchange rates

247Exchange has been around since 2014 and it allows you to buy Bitcoins with either a wire transfer or a credit card. The rates on the site are pretty descent but the buying process is a bit cumbersome. I recently tried to purchase Bitcoins at the exchange and had a some issues completing the transaction.

Maxing out a credit card

The business seems to be pretty legit and has a good reputation online. The good thing about the exchange is that it shows you all fees before hand so you don't get surprised by the final charge amount as may happen sometimes with different exchanges.

If all other options fail this is a good fall back for buying Bitcoins with your credit card.

Buy Bitcoins with a credit card through Bitcoin.com

Cons: High fees, questionable suppot

Bitcoin.com is an information website set up by Roger Ver. It aspires to be the go to site for everything Bitcoin related. The website recently collaborated with Simplex, the same credit card processor of Coinmama, in order to allow the purchase of Bitcoins with a credit card directly from the site.

The site takes a 2.5% service fee on top of the credit card processing fee which is 5%. Moreover, the exchange rate the site uses is around 1.5% higher than what you'd find at Bitstamp or Coinbase. The final thing to take into consideration is that it's not really clear who supports you if you buy Bitcoins on this site. There are help forums but they are for general Bitcoin subjects, and if you want to contact the company directly you'll need to go through an 8 steps questioner. Seems like answering customer questions isn't at the top of the list here.

And if you still haven't find the right method for you

There are 18 more exchanges that will let you buy Bitcoin with your credit card. Since I can't possibly review here's a complete list of all credit card accepting Bitcoin exchange.

So how do I know which exchange to use ?

It can get kind of hard to decide which exchange is the best platform for buying your bitcoins because there are so many of them. That's why we also created our best bitcoin exchange comparison page to make the process easier for you.

Note: If you’re looking to buy Bitcoin with Paypal or a credit card for trading purposes only then check out AvaTrade or Plus500 Bitcoin CFD trading. For more information read this post first.

If you have any more questions or comments about the methods I just described just leave me a comment below or contact us here.