Bitcoin’s Price Drop Comes With a Credit Card Warning

Bitcoin’s steep price drop may tempt bargain hunters, but using a credit card to buy the dip can quickly turn a risky trade into an expensive one.

That’s because buying Bitcoin or other cryptocurrencies with a credit card transaction could trigger a cash advance fee of 3% to 5% and a high interest rate on the amount of the transaction. If that happens, interest may begin accruing immediately, with no grace period. So consider these additional costs before reaching to buy crypto with a credit card.

If the transaction is treated as a cash advance, paying the balance off quickly may limit the interest charges, but it won’t erase the upfront cash advance fee. You may still be stuck paying a cash advance fee, often the greater of a minimum charge such as $10 or a percentage of the transaction.

And you can forget about earning credit card rewards. Cash equivalent transactions on credit cards are typically excluded from rewards. You may not earn rewards if the transaction is treated as a cash advance or cash-equivalent transaction so always check the card terms.

A $1,000 Bitcoin purchase could carry a $30 to $50 cash advance fee before interest even begins.

Is a cryptocurrency investment that many may see as risky worth the cost? Is it worth triggering a cash advance on your credit card to do so? Think over the costs carefully.

Would buying into an exchange-traded fund (ETF) with crypto exposure be a more pragmatic move? Investing in companies with Bitcoin exposure is another way to bring crypto into your portfolio.

First, a little background on the world’s most popular cryptocurrency, which recently had a market cap of roughly $1.2 trillion, depending on the day’s price.

Bitcoin, invented in 2009, is the world’s first decentralized digital currency. That means it operates without a central bank and allows users to send and receive money online without intermediaries such as commercial banks.

Some investors view Bitcoin as a hedge against inflation. Others use it as a speculative investment or digital currency. But Bitcoin is also known for extreme volatility, which means its price can move sharply in either direction.

Bitcoin has recently traded near or below $60,000, a sharp drop from its October 2025 all-time high of $126,198. For consumers interested in cryptocurrency, that kind of decline can make Bitcoin look tempting.

But a lower price does not necessarily mean Bitcoin is a safe buy.

Marc Lescarret, a certified financial planner with Marc Alan Wealth Management calls such a move “pure gambling.”

“What’s the difference between gambling and real investing? It is earnings or at least the potential for earnings. Bitcoin has no real use so if its existence continues I would expect a return of money supply growth, which is close to 5% a year, with an average standard deviation of 50%” Lescarret told us. 

“Consider a hedged ETF product, an ETF with put protection, or buying stocks that benefit from Bitcoin.” — Marc Lescarret of Marc Alan Wealth Management

He urges people who are looking to buy Bitcoin to steer clear of buying it directly.

“Based on volatility and money supply growth, owning Bitcoin directly can easily wipe out your investment,” Lescarret said.  

There are other ways to get Bitcoin exposure, though they still carry risk. 

“Consider a hedged ETF product, an ETF with put protection, or buying stocks that benefit from Bitcoin,” Lescarret told us.