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NFTs and credit cards: What you need to know

Everything you need to know about NFTs – including how to buy them with a credit card


Knowing how to buy an NFT is the first step. The second step is knowing which NFTs are right for you.

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In the past, you had to know a lot about cryptocurrency before you could start investing in NFTs, otherwise known as non-fungible tokens. These days, it’s a lot easier – not only because NFTs are starting to become more popular, but also because many NFT platforms are making it possible for users to purchase NFTs on credit.

“A surge in NFT platforms has helped push unique collectible assets into the mainstream consciousness,” explains Micah Carnahan, crypto expert and writer at Finder.com. “The ability to buy them with credit cards may now allow for even wider adoption.”

Before you bid on a Bored Ape, it’s important to know what NFTs are and how they work. Are NFTs considered cryptocurrency? Is it a good idea to buy them on credit, or should you only pay for NFTs with cash? We’ve put together an in-depth guide to help you understand everything you need to know about NFTs – including how to buy them with a credit card.

What are NFTs?

NFTs are unique digital items that can be bought, sold and traded. While NFTs are not considered a currency, each token can increase or decrease in value as the NFT market continues to grow – and people often purchase NFTs with the expectation that they will increase in value over time.

Many NFTs are associated with artistic or creative spheres. In 2021, for example, an NFT created by the graphic designer known as Beeple sold for $69 million dollars, and rapper Haleek Maul recently sold four songs as NFTs, earning over $250,000. Other types of NFTs are more analogous to trading cards and can be purchased at significantly lower prices.

In some cases, NFTs give you access to exclusive online communities or forums. The Bored Ape Yacht Club, for example, sells NFT avatars that double as membership tokens – and these same avatars can be posted to social media accounts, letting your friends and larger social network know you are part of the Bored Ape community.

Marie Tatibouet, CMO of cryptocurrency exchange site Gate.io, understands the value of these kinds of NFTs. “I may not know you, but if I see you rocking a Bored Ape Yacht Club, then I know you are someone,” Tatibouet says.

Are NFTs different from cryptocurrency?

Are NFTs a form of cryptocurrency, like Bitcoin and Ethereum? Not exactly.

“NFTs aren’t currency,” explains Shiv Madan, CEO of Moonwalk, a company that issues NFTs to online communities. “They are assets that are easily transferable because of the blockchain.”

Just in case you need a refresher, the blockchain is a networked ledger that tracks ownership of NFTs, cryptocurrency and other digital assets. Even when transactions are anonymized, the blockchain maintains a record of both purchases and value. Think of it as a public log of all crypto-related activity.

While Bitcoin and NFTs might appear similar to an outsider, they have two very different functions within the crypto world. Think of it as the difference between having dollars in your bank account and having art in your living room – except, in this case, the art can also get you access to online forums, events and other exclusive opportunities.

“You can use your NFT to unlock tickets, access virtual events, virtual streams, merch drops and more,” says Madan.

How do I buy an NFT?

Want to know how to buy an NFT? Be prepared for a learning curve. While many companies are working to make it as easy as possible to purchase NFTs, expect a multi-step process that could take some time to complete.

If you want to buy, sell and trade unique digital cats on CryptoKitties, for example, you’ll need to set up a blockchain-connected wallet that can be used to make purchases and store your purchased NFTs.

“It’s a good idea to go over a reputable guide on popular wallet extensions, like MetaMask, before forging ahead,” Carnahan explains.

You may also need to be approved by the NFT platform before you can begin buying NFTs online.

“Most platforms selling NFTs will require all registered members to go through a know-your-customer (KYC) process before making a purchase,” says Carnahan. “This process may require customers to upload pictures of their government-issued identification and proof of their current address.”

Once your wallet is set up and your account information has been verified by the appropriate platforms, knowing how to buy an NFT is as simple as selecting the token you want and making sure you have enough cryptocurrency in your wallet to cover the costs. Be aware that many NFT sites are run like auctions, so keep your budget in mind before you make any bids – and don’t invest in any NFTs that you can’t afford!

Can I buy an NFT with a credit card?

Is it possible to buy NFTs on credit? Absolutely. And the process is getting easier every day.

“One of the barriers to NFT investing is the learning curve associated with that first purchase,” Carnahan explains. “The ability to use a credit card for purchases simplifies the process.”

There are two ways to buy NFTs with a credit card. You can either buy cryptocurrency on credit and use your newly-purchased Bitcoin or Ethereum to buy NFTs, or you can find an NFT platform that allows you to convert credit to cryptocurrency at the point of purchase. Digital collectible site Rarible, for example, allows users to make NFT purchases with a Visa or Mastercard.

Be aware that many credit card issuers consider cryptocurrency purchases to be equivalent to a cash advance. This includes purchasing NFTs on credit, since what you’re actually doing is purchasing cryptocurrency which is then used to facilitate your NFT transaction. If you use your credit card to buy NFTs, be prepared to pay cash advance interest rates and fees on your transaction.

It’s also worth noting that if your credit card codes your crypto purchase as a cash advance, you won’t earn any rewards on your transaction. This means that even if you use one of the best credit cards to buy NFTs, you won’t get any cash back, points or miles for your purchase.

Instead of buying NFTs on credit, you may want to consider a crypto rewards credit card that allows you to earn cryptocurrency on each purchase instead of cash back or points. That way, you can use your credit card for everyday purchases, earn crypto as you shop and use your credit card rewards to buy NFTs.

Are NFTs a good purchase?

Should you buy an NFT? It depends. “Don’t do it just for the coolness factor,” says Tatibouet.

If you’re in the market for an NFT, it’s important to know what kind of token you want, how much you’re willing to pay and what the purchase can offer you in the future.

“An NFT has a value, it’s not just a piece of artwork,” says Madan. “You can appreciate it for its artistic value, you can sell it or you can hold it and it can appreciate in value.”

What are the pros and cons of purchasing an NFT?

“The advantages are that you have a cool piece of art that you can show off to your social media following and friends,” Tatibouet told us. “The drawbacks are the usual ones. You may get buyer’s remorse and you may have some difficulty in selling off your NFT.”

These pros and cons become a little more consequential if you’re purchasing NFTs on credit.

“The use of debt to purchase volatile assets like NFTs carries its own risks,” says Carnahan. “Make sure you understand what you’re getting into before swiping that card!”

If you purchase an NFT on credit and fail to pay off your balance, you could lose money – especially if the value of your NFT goes down instead of up. On the other hand, if you put an NFT on a credit card and pay off your balance before it turns into credit card debt, you’ll have the financial freedom to enjoy all the fun that comes with owning an NFT.

“If your monthly payment is affordable, it won’t immediately matter if the price of your new collectible goes up or down,” Carnahan explains.

Bottom line

Knowing how to buy an NFT is the first step. The second step is knowing which NFTs are right for you. People purchase NFTs as investments, whether they’re hoping to access an exclusive online community or own a unique piece of digital art.

Before you buy, Madan suggests asking yourself what you’re hoping to get out of your purchase long-term. “Does the NFT offer a membership?” asks Madan. “A community? Could it appreciate in value?”

Once you know exactly what you’re getting, you’ll be more likely to make an accurate judgment on what the NFT is worth – which becomes even more important if you plan to purchase your NFT with a credit card.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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