Can I Buy Bitcoin with a Credit Card on Cash App?

Published: 1st June, 2024 | Last Updated: 4th June, 2024

Markos Koemtzopoulos

Markos Koemtzopoulos is the founder and main writer of ElementalCrypto. He has been a lecturer at the University of Nicosia on cryptocurrencies and DeFi and has taught two courses on crypto and blockchain technology.

Yes, the Cash App allows you to deposit fiat currency and buy bitcoin with a debit or credit card. The following credit card issuers are accepted:

  • Visa
  • MasterCard
  • American Express
  • Discover

This article is part of my series on how to buy crypto.

Cash App credit card fees to buy bitcoin

Buying crypto with a credit card incurs 3% in fees, which is extremely high. You should never be in a hurry to buy crypto and paying extra fees to make a deposit is the wrong way to go about it. 

On top of that, consider that Cash App users will need to pay additional fees to buy crypto. If your bitcoin purchase is more than $1000, the fee is 1.75%. Fees are even higher for smaller amounts. Crypto trading platforms such as crypto.com and Binance charge much lower fees. If you are serious about crypto, you should consider those options.

What payment methods does Cash App support?

You can make a direct deposit on the Cash app using the following methods:

  • ACH bank transfer
  • Direct deposits from your bank account
  • Wire transfers
  • Credit card or debit card deposit

ATM cards, PayPal, and business debit cards are not supported.

How to deposit on CashApp using your credit card

To buy crypto with a credit card on the Cash App, follow these steps:

    1. Sign up for the Cash App mobile app. You must share your personal information, such as your name, phone number, and email address. 
    2. Once you have completed the identification verification, launch the Cash App on your mobile device.
    3. Access the Banking Tab: Tap on the banking icon, which looks like a house or a bank, located at the screen’s bottom left corner.
    4. Add Funds: Tap on the “Add Cash” button.
    5. Enter Amount: Enter the amount you wish to add to your Cash App balance.
    6. Select Payment Method:
      •  Tap on the “Add” button.
      • Select “Credit Card” as your payment method if it is not already selected. 
    7. Enter Credit Card Details: If this is your first time using a credit card on the Cash App, you will need to enter your credit card information, including the card number, expiration date, CVV, and billing ZIP code. 
    8. Confirm the Transaction: Once you have entered your credit card information and the desired deposit amount, review the details and tap “Add” to confirm the transaction.
    9. Verify the Transaction: You may be asked to verify the transaction through a security code sent to your phone or email, depending on your bank’s policies.

To buy bitcoin with a credit card on the Cash App:

Follow these steps after adding funds to your Cash App balance:

    1. Open Cash App: Launch the Cash App on your mobile device.
    2. Navigate to the Bitcoin section:
      • Tap on the Bitcoin icon located at the bottom of the screen.
    3. Buy bitcoin: Tap on the “Buy” button.
    4. Enter Amount: Enter the amount of bitcoin you want to purchase.
    5. Confirm Purchase: Review the details of your purchase, then tap “Confirm” to complete the transaction.
    6. Verify Purchase: You may need to enter your Cash App PIN or use biometric authentication to confirm the purchase.

Ensure your credit card issuer allows transactions with Cash App and cryptocurrency purchases, as some banks may have restrictions. Additionally, note that using a credit card to add funds to Cash App or buy cryptocurrency may incur additional fees.

Why is it not a good idea to use a credit card to buy bitcoin? 

Crypto is volatile and buying it with a credit card means you are buying it with money you don’t have. Even buyers with good credit scores will have to pay an exorbitant interest rate on their cards if they don’t repay. Cryptocurrencies are extremely volatile and you may end up in the red at the end of the month. You don’t want to be paying interest rates in installments on top of that. 

Once you buy your bitcoin with a credit card, where do you store it? 

Cash App is a custodial platform. This means that they hold custody of your digital assets on your behalf. But should anything go wrong, there’s no recourse for you to claim your tokens. A safer alternative is to move your bitcoin to a non-custodial wallet. This means that you will have custody of your crypto. 

How to send bitcoin from the cash app to the crypto wallet

To send Bitcoin from your Cash App to an external crypto wallet, follow these steps:

    1. Open Cash App: Launch the Cash App on your mobile device.
    2. Access Bitcoin Section: Tap on the Bitcoin icon located at the bottom of the screen.
    3. Withdraw Bitcoin:
      • Tap on the “Withdraw Bitcoin” button. If you don’t see this button, you may need to enable Bitcoin withdrawals by verifying your identity and enabling withdrawals in the app settings.
      • Follow any prompts to enable Bitcoin withdrawals if necessary.
    4. Enter Amount: Enter the amount of bitcoin you want to send. You can also tap on the “Use Max” option to send all your available Bitcoin.
    5. Enter the wallet address:
      1. Tap on the “Enter manually” option to type in the recipient’s Bitcoin wallet address.Alternatively, you can use the QR code scanner by tapping the QR code icon and scanning the recipient’s wallet address.
    6. Confirm and Send:
      • Double-check the wallet address to ensure it is correct. Bitcoin transactions are irreversible, and sending to an incorrect address can result in a loss of funds.
      • Tap on the “Next” button.
      • Review the details of the transaction, including any fees that may apply.
      • Confirm the transaction by tapping on “Confirm” or “Send.”  
    7. Verify the Transaction: You may be asked to enter your Cash App PIN or use biometric authentication to confirm the transaction.
    8. Transaction Processing: Once confirmed, the transaction will be processed. Bitcoin transactions may take some time to be confirmed on the blockchain, so you may need to wait for the transaction to complete.
  1.  

Ensure you have enough Bitcoin in your Cash App balance to cover the amount you want to send and any applicable transaction fees. Also, verify the recipient’s wallet address before sending the bitcoin.

Tax implications

Be aware that you must pay capital gains tax on any profits you make from buying and selling bitcoin or other crypto.

Alternative platforms where you can buy bitcoin with a credit card

Crypto exchanges

Most crypto exchanges, especially outside the United States, allow credit card crypto purchases. Popular exchanges that do this are

  • Binance
  • Crypto.com
  • Kraken
  • Uphold

The reason to use a crypto exchange is that

    1. They offer a wider range of cryptocurrencies to choose from.
    2. They include advanced trading tools for those who want them.
    3. They charge a lower fee for trades and deposits.
    4. They offer two-factor authentication and store the majority of funds in cold storage.
    5. They sometimes offer more payment options, depending on your country. 

 

FAQ

Can I use a credit card at a bitcoin ATM? 

Most ATMs only allow debit card or cash deposits. Also, ATM fees are much higher, sometimes 10% or higher.

What happens if I buy $1 of Bitcoin on Cash App?

There's not much that will happen. If the value of bitcoin increases, your dollar value will also multiply. Not that Cash App only allows you to withdraw a minimum of 0.001 BTC, which at the time of writing is $70 worth.

How much Bitcoin can I purchase on Cash App?

There is no limit to the amount of bitcoin you can purchase but the maximum amount you can withdraw daily is $2000 worth of Bitcoin. 

Is Bitcoin on Cash App a good idea?

Cash App is a subsidiary of Block, a company founded by Jack Dorsey, the founder of Twitter. However, your bitcoin is in the custody of Cash App when you store it there. For maximum security, you are better off sending that bitcoin to a crypto wallet. The easiest way is to download a digital wallet. The most secure way is to use a hardware wallet. 

Markos Koemtzopoulos is the founder and main writer of ElementalCrypto. He has been a lecturer at the University of Nicosia on cryptocurrencies and DeFi and has taught two courses on crypto and blockchain technology.

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