The Complete Guide to Buying Cryptocurrency with a Credit Card

When purchasing cryptocurrencies in Taiwan, many investors consider using credit cards for direct deposits. This method is indeed quick and convenient. However, in practice, many people encounter failures when trying to use their credit cards. This article will delve into the current situation, policy restrictions, and alternative options for buying crypto with a credit card.

Policy Restrictions in Taiwan on Buying Cryptocurrency with Credit Cards

Policy Background

In 2022, Taiwan’s Financial Supervisory Commission (FSC) issued a letter to the banking association, clearly stating that credit cards are fundamentally consumer payment tools and should not be used for investment or high-risk transactions. Based on this understanding, the FSC required credit card acquiring banks not to establish merchant relationships with virtual asset service providers (VASP), nor to designate VASP as payees.

This policy has resulted in most Taiwanese banks’ credit cards being unable to directly deposit funds to purchase cryptocurrencies. Although the regulation does not explicitly distinguish between domestic and foreign acquirers, it significantly restricts the use of credit cards in crypto transactions.

Considerations Behind the Policy

The Taiwanese government’s implementation of this restriction is mainly based on the following points:

Anti-Money Laundering and Regulatory Concerns — The anonymity features of cryptocurrencies make them susceptible to misuse for money laundering, terrorist financing, and other illegal activities. To prevent such risks, governments typically enforce strict KYC (Know Your Customer) and AML (Anti-Money Laundering) policies.

Decentralization Is Difficult to Control — In traditional financial markets, governments can regulate through restrictions on financing, use of national funds, etc. However, due to the decentralized nature of cryptocurrencies, authorities cannot directly intervene in prices or liquidity.

Investor Protection and Complaint Management — Recent incidents of exchange collapses and NFT crashes have led to significant investor losses. These investors often complain to the FSC, but cryptocurrencies are not directly regulated by the government. While the government cannot outright ban citizens from investing (which could be seen as authoritarian), it must handle numerous complaints, leading to regulation of service providers as a compromise.

It’s worth noting that major Western banks and international credit card companies (such as Visa, Mastercard) are actively expanding cooperation with cryptocurrencies. In contrast, Taiwan’s recognition of virtual asset service providers is limited, making related policies more symbolic than effective in regulation.

Comparison of Deposit Methods for Buying Crypto

Currently, the main methods for buying cryptocurrencies include credit cards, wire transfers, bank transfers, third-party payments, and C2C transactions. The following compares the three most common:

Pros and Cons of Buying Crypto with a Credit Card

Advantages

Ease of Operation — No complicated banking procedures; can complete transactions with a few taps on your phone or computer.

Credit Card Rewards — For consumers who value points, purchasing crypto can also earn rewards.

Small Investment Friendly — For investors with limited funds, credit cards offer a low-threshold deposit method.

Disadvantages

High Fees — The fee for buying crypto with a credit card is usually above 1.5%, sometimes reaching 3%.

Unfavorable Exchange Rates — Credit card currency conversion rates are often 3–5 percentage points worse than bank rates.

Significant Cumulative Costs — Considering fees and exchange rate margins, spending 100 yuan might only buy virtual assets worth 95 yuan. For large investments, this cost difference is quite substantial.

Based on these factors, large investors typically prefer wire transfers. The advantages of wire transfer include: fixed fees that decrease as the amount increases, despite longer processing times (requiring intermediary banks), which have minimal impact on long-term investments; many exchanges offer higher interest rates to attract large investors.

Practical Steps to Buy Crypto

The process on different platforms is generally similar: Register → Verify identity(KYC) → Deposit → Trade → Withdraw.

When using a credit card to buy crypto, ensure the following three elements:

1. Choose the target currency
Search for the trading pair (e.g., BTC/USD, ETH/USD) on the platform.

2. Select deposit method
Go to the deposit page and choose the “Credit Card” option.

3. Confirm transaction amount
Enter the amount to purchase, paying attention to currency units and exchange rates.

After completing these settings, the system will automatically calculate the actual amount of crypto you will receive based on real-time rates and fees. Before confirming the transaction, it’s recommended to review the full cost details.

Finding Alternative Ways to Buy Crypto

Although Taiwan’s government prohibits VASP platforms from becoming authorized merchants for credit cards, this ban does not distinguish between domestic and overseas institutions. Therefore, other channels for purchasing crypto still exist. To reduce risk, it is advisable to choose platforms that:

Licensed and Regulated Exchanges — Select platforms supervised by reputable financial regulators (such as ASIC, CFTC, FCA), which offer higher security and credibility.

Support Multiple Deposit Methods — Ideally, the platform should support credit cards, wire transfers, local bank transfers, and other options, providing investors with more flexibility.

Offer CFD Options — If you only want to participate in price movements without holding actual assets, Contracts for Difference (CFD) are a safer and more convenient alternative. These products are usually under stricter regulation by financial institutions, reducing the risk of platform insolvency.

Future Outlook for Buying Crypto with a Credit Card

While credit cards have been one of the most convenient ways to buy cryptocurrencies, Taiwan currently faces multiple restrictions. However, it’s important to note that the importance and user base of cryptocurrencies continue to grow.

Initially, retail small-scale investments received limited attention. Later, companies, recognizing the devaluation risk of fiat currency during large-scale quantitative easing, began allocating funds to cryptocurrencies. Some countries have even adopted Bitcoin as legal tender, given its liquidity and relatively stable exchange rate.

Therefore, if government policies cause cryptocurrencies to be viewed with fear, it might actually cause investors to miss out on participating in emerging financial assets.

Summary

For Taiwanese investors, although direct credit card purchases of crypto are restricted by policy, there are still ways to participate. The most practical approaches are:

Small-scale testing — First, use domestic platforms to exchange TWD for USDT stablecoins, then trade for other cryptocurrencies.

Direct trading — Use C2C features on international exchanges to trade directly with other users.

Credit card enthusiasts — Try different banks’ credit cards or choose reputable platforms that accept credit card deposits.

Regardless of the method, the key is to understand the costs, risks, and policy environment of each deposit channel beforehand, and make investment decisions that suit your needs. How policies will evolve remains to be seen, but mastering the basics of crypto will ultimately be beneficial for long-term participation.