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Bitcoin The Almighty Buck

Five Major Credit Cards Are Now Blocking Cryptocurrency Purchases (cnbc.com) 253

An anonymous reader quotes CNBC: J.P. Morgan Chase, Bank of America and Citigroup said Friday they are no longer allowing customers to buy cryptocurrencies using credit cards. "At this time, we are not processing cryptocurrency purchases using credit cards, due to the volatility and risk involved," a J.P. Morgan Chase spokesperson said in a statement to CNBC. "We will review the issue as the market evolves."

A Bank of America spokesperson also said in an email that the bank has decided to decline credit card purchases of cryptocurrencies. Citigroup said in a statement that it has "made the decision to no longer permit credit card purchases of cryptocurrency. We will continue to review our policy as this market evolves." Earlier in January, Capital One Financial said it has decided to ban cryptocurrency purchases with its cards. Discover Financial Services has effectively prohibited cryptocurrency purchases with its credit cards since 2015.

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Five Major Credit Cards Are Now Blocking Cryptocurrency Purchases

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  • Fuck them (Score:2, Insightful)

    by Anonymous Coward

    Who do they think they are stopping me from purchasing a totally legal 'thing' with the card? "Volatility" of my purchase is none of their concern, only concern they have is if i pay my bill.

    They are melting down from fear.

    Need to sue the bastards.

    • go ahead, sue

      it's their money, stupid

    • by bjdevil66 ( 583941 ) on Saturday February 03, 2018 @10:54PM (#56064263)

      The banks just watched millions of homeowners gamble with the bank's money, and it blew up in the banks' faces while debtors walked away from the burst bubble. And that was with tangible collateral - not digital currency.

      I guess the banks didn't learn much from the Great Recession.

      • "I guess the banks didn't learn much from the Great Recession."

        Of course they learned something. They learned that if you screw up badly enough, the government will bail you out.

        What they didn't learn is that there likely are probably limits to the ability of the government to prop things up. What you and I should worry about is the apparent determination of the Republican party to test those limits by resurrecting the same loose money, anti-regulation policies that failed spectacularly in the 2000s.

        Is th

    • "Who do they think they are stopping me from purchasing a totally legal 'thing' with the card? "Volatility" of my purchase is none of their concern, only concern they have is if i pay my bill."

      Credit card companies are sort of like a mixture of a bank and a casino. They lend money short-term, collect fees, pay their operating expenses, eat a few losses when a client joins ISIS or enters a monastery or is tossed into a penitentiary with a substantial unpaid bill. They get to keep whatever is left over. Th

  • by geek ( 5680 ) on Saturday February 03, 2018 @08:20PM (#56063741)

    Because they don't directly compete with our business

    • by sgage ( 109086 )

      Exactly. Where's the mystery?

    • by rtb61 ( 674572 )

      They do not compete with the current business model, in point of fact, they were created by and are totally exploitable by the current business model. What they are is competitors to a new business model. Energy backed crypto and the way is being cleared for it's launch. Venezuela tried to get in early but they can not compete against an international exchange for approved kWh backed cryto currency, sure they'll be able to get on that exchange but they will not be able to effectively create their own. The r

    • Pegged to the price of pork, its value will soar in the Mad Max future criplecurrency enthusiasts have been masturbating to for decades.

      HUGE derivative potential.

  • by PhrostyMcByte ( 589271 ) <phrosty@gmail.com> on Saturday February 03, 2018 @08:25PM (#56063769) Homepage

    We've moved to a mostly cashless society and made a handful of banks the arbiters of what we're allowed to buy.

    And Bitcoin is designed explicitly to prevent this kind of abuse. Of course they're afraid of it.

    • by rsilvergun ( 571051 ) on Saturday February 03, 2018 @08:54PM (#56063879)
      the major banks could easily take it over. Hell, there's tons of evidence that the price has been heavily manipulated by the various exchanges, and they have a fraction of the power of a bank. They're not afraid, they don't want to deal with the risk of disputed transactions (especially in jurisdictions where disputes are tightly regulated).

      The best antidote to banks controlling a cashless future is government regulation. Somebody has to be in charge of the money supply or it'll become unstable and wreck the economy. But giving somebody that power inevitably results in a strong concentrations of power. The only effective counter balance to that is Democracy. This is one of the reasons the left has been pushing for mandatory (and anonymous) voting. It really is a civic duty at that point.
      • This is one of the reasons the left has been pushing for mandatory (and anonymous) voting. It really is a civic duty at that point.

        Ok, at this point, I have absolutely NO idea what country you are talking about....

        It certainly isn't the US, I've never heard anyone here talking about compulsory voting....left or right.

        • Here ya go [cnn.com]
        • This is one of the reasons the left has been pushing for mandatory (and anonymous) voting. It really is a civic duty at that point.

          Ok, at this point, I have absolutely NO idea what country you are talking about....

          It's just a crazy crypto-conservative for whom every possible thing is "the left".

          Its the 21st century version of "Now they have allowed white people and brown people to get married, next thing we'll have dogs and cats living together in sin."

      • by dmt0 ( 1295725 )

        The only effective counter balance to that is Democracy.

        The only effective counter balance is Decentralization

        • State governments can't stand up to global mega corps. They get bought out and overwhelmed one by one. Meanwhile the mega corps build central governments for their own use which the small government proponents refuse to participate in on principle and therefore end up being crushed by.

          Sorry, You're going to have a powerful central government whether you like it or not. They're just too useful. The only question is are you going to have a seat at the table.
      • You've got so many concepts all mixed up that I'm not sure where to begin... you seem to think that somehow democracy is going to prevent a government from abusing a monetary policy.

        A democracy has never prevented this - if anything, a democracy has sped decline due to the people (demos) voting power (kratia) into their own pockets - welfare and social programs. The first and best example of this was Athens violating treaties with neighboring cities by stealing money and resources that were intended for th

      • by Bert64 ( 520050 )

        Even where disputes are regulated, if you purchased bitcoin and received what you paid for at the price you were shown at the time of purchase then the dispute would be rejected.
        It doesn't matter if the value of bitcoin goes up or down, you agreed to buy a specific amount of bitcoin for a specific price, it was entirely your choice to do so.

        Disputes/chargebacks are for when the seller does not provide what was agreed - ie they don't provide the goods, provide less (of the actual good, ie they sent you 1 bit

    • by smccurry ( 572146 ) on Saturday February 03, 2018 @09:05PM (#56063925)
      I think the problem is, if you buy crypto on credit, it's basically a cash advance. You're buying another currency. Even if that weren't the case, its overly easy to buy crypto on credit and sell it for cash seconds later. It would be so easy to max out a credit card and run off with the cash, which I'm guessing is their main motivation.
      • by tlhIngan ( 30335 )

        I think the problem is, if you buy crypto on credit, it's basically a cash advance. You're buying another currency. Even if that weren't the case, its overly easy to buy crypto on credit and sell it for cash seconds later. It would be so easy to max out a credit card and run off with the cash, which I'm guessing is their main motivation.

        Well, the solution is to treat it as a cash advance. Which is perfectly legal - some transactions are treated as cash advances rather than a standard credit transaction.

        I th

    • by LynnwoodRooster ( 966895 ) on Saturday February 03, 2018 @09:13PM (#56063947) Journal

      You can buy whatever you want with a BoA, Chase, or other debit card - that's your money, use it as you want. A credit card is using their money, and promising to pay it back later. Just like when you get a mortgage or car loan, the person who actually has the money gets to dictate what it's used on.

      It's the same thing with the USPS - you can use a credit card to buy postage, but if you want a postal money order then you need to pay cash or a debit card - you cannot use credit to buy, essentially, a monetary instrument.

    • We've moved to a mostly cashless society and made a handful of banks the arbiters of what we're allowed to buy.

      And Bitcoin is designed explicitly to prevent this kind of abuse. Of course they're afraid of it.

      Cash is what explicitly prevents that kind of abuse, and it's still around.

    • by sgage ( 109086 )

      You are confused. You don't 'buy' Bitcoin. You 'invest', 'speculate', etc. in Bitcoin. This has become increasingly clear.

      The banks are only arbiters of what you can buy with THEIR money. Get it? You can 'buy' all the Bitcoin you want with your own money.

      This whole thread is just about the most confused whiny shit I've ever encountered in Slashdot - which is saying something.

    • Re: (Score:2, Informative)

      by mhkohne ( 3854 )

      Bitcoin is utterly worthless at performing the kinds of transactions that people want to make day-to-day. The only thing these banks are afraid of is people doing a chargeback when their exchange goes belly up and they are left holding the bag. Which would then leave the card company holding the bag - which is not a position they like to be in.

      Since they bear the brunt of things going wrong with the transaction, they've decided they don't want to get involved.

      Like someone else said: if you've got the money,

    • We've moved to a mostly cashless society and made a handful of banks the arbiters of what we're allowed to buy.

      And Bitcoin is designed explicitly to prevent this kind of abuse. Of course they're afraid of it.

      Shit - where am I going to buy my heroin and Eastern European sex slaves now?

  • by The_Noosphere ( 4330283 ) on Saturday February 03, 2018 @08:26PM (#56063771)
    To prevent banks to tell you what to do with your money.
    • by DRJlaw ( 946416 ) on Saturday February 03, 2018 @09:11PM (#56063943)

      To prevent banks to tell you what to do with your money.

      The rule applies to credit card transactions, not debit card transactions. It's their money - you've only pinky-promised to pay back the debt.

      Since pretty much every ATM card functions as a debit card, there is probably nobody preventing you from buying cryptocurrency with your money. But yes, your bank feels entitled to dictate how you spend their money.

      • The rule applies to credit card transactions, not debit card transactions. It's their money - you've only pinky-promised to pay back the debt.

        Oh it's way more than pinky promise. They'll come back for more than just a finger if you can't pay up. In the end it may cost you an arm and a leg.

        -- Reading this SIG repeatedly may cause a snow crash, you have been warned!

      • by hawguy ( 1600213 )

        To prevent banks to tell you what to do with your money.

        The rule applies to credit card transactions, not debit card transactions. It's their money - you've only pinky-promised to pay back the debt.

        Why does the bank care (or have any say in) whether I buy $10k of cyptocurrency or a $10k diamond ring that I mail to my Russian fiance?

        The get their transaction fee either way and they have no collateral either way.

        • by DRJlaw ( 946416 )

          Why does the bank care (or have any say in) whether I buy $10k of cyptocurrency or a $10k diamond ring that I mail to my Russian fiance?

          Because until you have paid the bill, it's the bank's money on the line, and too many people are short-sighted, scam-prone, or plain untrustworthy [creditcards.com], and ain't nobody got time for that nonsense.

          If you don't want them to have a say, use a debit card.

          • by hawguy ( 1600213 )

            Why does the bank care (or have any say in) whether I buy $10k of cyptocurrency or a $10k diamond ring that I mail to my Russian fiance?

            Because until you have paid the bill, it's the bank's money on the line, and too many people are short-sighted, scam-prone, or plain untrustworthy [creditcards.com], and ain't nobody got time for that nonsense.

            If you don't want them to have a say, use a debit card.

            But their money is on the line when I buy jewelry, a jet ski, or whatever frivolous purchase I want to make, why do they draw the line at cryptocurrency? They gave me a credit limit because presumably they expect me to be able to pay it back, why do they think I'm less likely to pay them back when I buy $5000 in cryptocurrency than when I spend $5000 on airfare+hotel+tickets to go see a Justin Bieber concert?

            • by DRJlaw ( 946416 )

              why do they draw the line at cryptocurrency?

              I'm sorry, I merely assumed that the linked material would answer the question "why." Particularly since it directly addresses casino chips, lottery tickets, and mutual funds and stocks.

              If that does not suffice, the answer is "because we say so and, if you don't like it, go find another source of credit."

    • by LynnwoodRooster ( 966895 ) on Saturday February 03, 2018 @09:15PM (#56063953) Journal
      How is a credit account "your money"? A debit card is your money - it pulls from your own bank account. But a credit card pulls from the bank's account, and you just have a promise to pay it back sometime in the future. They are not telling you what you can do with your money, but telling you want you can do with their money.
      • by Kjella ( 173770 )

        How is a credit account "your money"? A debit card is your money - it pulls from your own bank account. But a credit card pulls from the bank's account, and you just have a promise to pay it back sometime in the future. They are not telling you what you can do with your money, but telling you want you can do with their money.

        But technically nothing stops you from making a cash withdraw and buying bitcoins with it or buying gold and selling that to buy bitcoins or buying your groceries on credit while spending your cash on bitcoins. What they approve is a credit limit, it shouldn't be whether I use it to buy groceries or beers at the local pub. I'm not sure if you're seriously suggesting what you're suggesting, but I certainly don't think the bank or credit card money should be allowed to inspect my finances simply because I owe

        • by SirSlud ( 67381 )

          Funny you mention mortgages. I mean, here's a credit product offered by banks that is so restrictive you can only buy one thing with it - a house. And they reason why they don't care that much on mortgages is if you default, you've already promised to give the house to them. (To say nothing that even acknowledging that you have a credit limit already points out that banks place limits on how much money you can spend, which effectively restricts what you spend it on.) They're not inspecting your finances - t

          • by bn-7bc ( 909819 )
            Wel jess it is very restricted, why is that? Oh yes you get a relatively speaking, low interest rate because the bank has som securety (your hose/appartment) which the can take if you fall to much behind on your payments, you allso need 10-20% of the purcase price (at least in the eu),, to qualify fopr the loan in teh first place and show a steady income. From the banks point of view it is all about amnaging risks.
        • by DRJlaw ( 946416 )

          But technically nothing stops you from making a cash withdraw and buying bitcoins with it or buying gold and selling that to buy bitcoins or buying your groceries on credit while spending your cash on bitcoins.

          Besides the initial ~3% fee on the cash advance, the different interest rate (1.5-2.0x the "credit" interest rate), and the substantially lower cash advance limit on the account? Besides the fact that now you have cash, but no way to electronically transmit that cash to a remote cryptocurrency exchan

    • by SirSlud ( 67381 )

      Your money doesn't come from credit cards, and banks telling you how you can use your credit card isn't them telling you how you can use your money. God, I love Americans, they can't even tell the difference between what constitutes borrowing money and having money at this point.

    • Show me a Bitcoin exchange that offers credit.

      Don't hurry, I can wait.

  • I can see how funding speculative investments with credit shouldn't be encouraged, but what about people who have the money in the bank? Are they doing anything to debit cards?

  • It's due to the risk of chargebacks from people that buy something that subsequently loses value. You often can't buy stocks using a credit card for the same reason.

  • Chargebacks (Score:3, Interesting)

    by Anonymous Coward on Saturday February 03, 2018 @08:39PM (#56063827)

    They are probably worried about chargebacks. Both for legitimate cases where the consumer got ripped off, and for cases where a stolen card is used to buy crypto. If the CC banks can't stick it to the vendor, they have to eat the loss to stay on the right side of their promises and consumer protection laws. And in this case, they must have seen enough abuse to decide to shut down that vector.

  • by Presence Eternal ( 56763 ) on Saturday February 03, 2018 @08:44PM (#56063843)

    I recently made a purchase from a place that offered a bitcoin discount. I said "Ah hah, I'll be clever." and bought some on coinbase with my credit card to make the purchase.

    Holy hell did I ever get shafted up the ass with fees. Ten bucks for buying a "cash equivalent", two bucks for "foreign transaction", five bucks to buy the bitcoin on coinbase, and another five bucks to send the coin with coinbase. The discount was big enough to eat most the fees, but I still lost out. Lesson learned I guess.

    • by SirSlud ( 67381 )

      No such thing as a free lunch, even though it's effectively 90% of the message of all marketing these days.

      "The discount was big enough to eat most the fees, but I still lost out."

      It's almost like a company offering a bitcoin discount in the context of their business is better positioned to know who will come out on top in that kind of exchange. (It should be immediately obvious they can at least benefit from some economy of scale from a fee standpoint.)

  • Like for example the purchase of illegal drugs?

    What happens if an unscrupulous bitcoin dealer (Yes, I know, it is so unlikely - all the bitcoin dealers I know are incredibly honest. The idea of one bending the law is unthinkable... ;D) codes the sale as "one flash drive with associated software, price $88,000 + $15 handling fee". After it goes through, will they cancel the sale and reverse the charge? Will they demand to see the software on the flash drive? Will they cancel the merchant account of the s

    • Like for example the purchase of illegal drugs?

      Yes. All the credit cards prohibit using their facilities to facilitate illegal transactions.

      What happens if an unscrupulous bitcoin dealer (Yes, I know, it is so unlikely - all the bitcoin dealers I know are incredibly honest. The idea of one bending the law is unthinkable... ;D) codes the sale as "one flash drive with associated software, price $88,000 + $15 handling fee". After it goes through, will they cancel the sale and reverse the charge? Will they dema

    • by SirSlud ( 67381 )

      Nothing about this post makes any sense. I can't even picture how you think the mechanics of any of this works? They're not protecting themselves from buying bitcoin via postal mail on a flashdrive because that's not how bitcoin is sold. "Aha," you say, "it can be sold that way," and I'd say .. who the fuck cares? The bank does not, that'd be such a tiny part of how bitcoins are purchased as to be functionally meaningless in the context of their business. And it's not about being sued. They just don't want

    • Pretty sure they still allow cash advances in Vegas.

  • If you really want to protect consumers, block purchases of garbage like in-game currency.

  • by PPH ( 736903 ) on Saturday February 03, 2018 @09:49PM (#56064075)

    Buy Bitcoin with a debit card. That's YOUR money (as opposed to CC funds loaned to you by some financial institution) and you can spend it as you please.

  • by DogDude ( 805747 ) on Saturday February 03, 2018 @10:06PM (#56064139)
    This whole discussion is hilarious. People are upset about not being able to use their credit cards to buy a "currency" that's designed to avoid using credit cards.
  • Matter more than an attempt to dictate good spending habits. The credit card companies fear blow back from the price of the bitcoin moving significantly during the time it takes to formalize the transaction, which on bitcoin can be several 10s of minutes.

  • by rockmuelle ( 575982 ) on Saturday February 03, 2018 @10:54PM (#56064265)

    This is not about volitility or any other type of consumer protection. This is about protecting their points programs.

    Basically, people were buying crypto coins on their credit cards, getting the points for the purchase, then immediately selling the coins and paying off the card. The points more than made up for the transaction costs.

    Since all these cards were being paid off before any interest accrued, the credit card companies were losing a lot of money on the transactions in the form of reward payouts.

    The CC firms will never admit this publicly, but given the number of people I knew who were doing this, I’d bet this is the real reason they’ll disallowing the purchases.

    • Wait. This makes a lot of sense.

      Who are you and why are you posting on /.? Dude, here is conspiracy and the-evil-companies-want-to-swindle-us-out-of-our-money, sensible arguments is next door.

    • by sodul ( 833177 )

      Actually this does not make much sense to me but I'll admit I do not know much about the invisible flow of credit card transaction money. I pay a most things with credit card and I always pay them as soon as they are due and never pay anything more, than what I paid the merchants for. So by your logic the CC companies should want to avoid me, yet they keep on raising my credit limit to high level. If the merchant fees were not enough to cover the point systems then why would they entice me to spend even mor

    • In that case, why are they only doing it for cryptocurrencies? My dad's boss does something much like this, but with business expenses instead of cryptocurrencies. He charges huge business expenses to a credit card, immediately pays them off, and as a result has a practically limitless supply of air miles.

  • by Opportunist ( 166417 ) on Saturday February 03, 2018 @11:40PM (#56064417)

    But I can still buy penny stocks, right? And options?

    Thank god, not all options to trade in highly volatile investments are banned. Only the ones they don't participate in.

  • I am all too willing to point out that bitcoin is not an investment. But there is no reason people should be blocked from purchasing small amounts of it so as to do transactions. For a credit company that should probably be $1000 over a couple months.

    The value of bitcoin is the amount of transactions done with it. The more transactions you do and other people do the more you should keep a certain amount of it rather than converting it with every transaction.

    Bitcoin itself has a slow 15 or so minute transac

  • by TsuruchiBrian ( 2731979 ) on Sunday February 04, 2018 @01:57AM (#56064709)
    If there is one thing I absolutely need the bank issuing me a credit card to do, it is to prevent from buying things that I may not realize are risky.
  • Because you are all not "Adult" enough to make your OWN purchasing Choices.... SMH!
  • The proper answer is that they should formally recognise bitcoin as an actual currency and treat it as such. But that would put them in what they alone perceive as a far worse situation, which is to have to formally accept and acknowledge that their institutional monopoly has a competitor.

Never buy what you do not want because it is cheap; it will be dear to you. -- Thomas Jefferson

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