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Bitcoin Vs. Credit Card Transactions: What’s the Difference?

In this technological era, cash is not the only way to purchase anything. Transactions and payments have gone digital in 2022. Many people prefer credit card transactions in 2022. An individual doesn’t have to wait to accumulate funds to make a transaction. One can use the available credit limit to make an urgent transaction in 2022. One can always repay the credit card money when they have ample funds. In this digital era, one should know what is a credit card and its uses. With the rise of fintech, many people are shifting their focus toward Bitcoin transactions. Read on to know the dissimilarities between credit card transactions and Bitcoin transactions.

Understanding the Concept of Bitcoin Transactions

Bitcoin is the first digital currency designed to support peer-to-peer transactions with increased safety. Unlike other digital transactions, Bitcoin transactions do not include a third party. With Bitcoin, peer-to-peer transactions can be made between the sender and the receiver. Bitcoins can be stored in any authorized digital wallet and used for transactions. No other financial institution is involved in Bitcoin transactions. Just like cash, the funds are pushed directly to the receiver in a Bitcoin transaction.

Bitcoin transactions are supported by a wide network of computers. Every Bitcoin transaction is recorded on a blockchain network which is a decentralized network. Anyone can see your Bitcoin transaction on the blockchain network but cannot manipulate it. No one will ask for your name or bank account number for making a Bitcoin transaction. You are in complete control of your Bitcoin transaction, as it is based on decentralized technology. When making a Bitcoin transaction, no one will apply any limits as it is a decentralized transaction.

Understanding the Concept of Credit Card Transactions

Credit card transactions are entirely different from Bitcoin transactions. Consider you make a credit card transaction at a shop to buy something. When you do so, you are authorizing the merchant to pull funds from your credit limit or bank account. A credit card transaction passes through middlemen before reaching its destination. The main parties involved in a credit card transaction are the credit card issuer, the merchant, the payer, and the acquirer. Every party involved in a credit card transaction charges a fee from the other party. For example, credit card issuers charge processing fees from the merchants to process the payments received via credit cards.

Most of the time, the convenience charge and processing fee are passed on to the payer. For the same reason, the cost of credit card transactions goes high. Credit cards are physical cards used for digital and POS payments. Since credit cards are physical cards, they are to be kept safe at all times. Lossing a credit card may invite serious hassles. However, credit card features include blocking the card when it is lost/stolen. Credit card issuers try their best in providing a secure online payment system to users.

Credit Cards Transactions vs Bitcoin Transactions: Which is Better?

Credit card transactions and Bitcoin transactions can differ on several parameters. Both have their pros and cons, and it will depend on the availability and choice of the user. Some points that will help you choose between credit cards and Bitcoin transactions are as follows:

  • Once your credit limit is approved, you can use it to make payments. Your credit limit will not be decreased abruptly due to economic conditions. However, Bitcoin is a digital currency whose price fluctuates regularly. The worth of your stored Bitcoins may increase/decrease overnight.
  • Credit card transactions are comparatively less secure than Bitcoin transactions. It is because blockchain was developed as a secure technology that cannot be easily hacked. However, if you use your credit card wisely, you can secure yourselves from phishers and hackers.
  • You can use the credit card details to make an online payment. You can also swipe your credit card via a POS machine to make payments. Many credit cards also allow you to transfer money to your bank account or withdraw cash. On the other side, Bitcoin transactions are made directly via your digital wallet.
  • In many countries, the Bitcoin market is under uncertainty due to a lack of compliance rules. Also, not many merchants accept payments in Bitcoins. On the other hand, the credit card market is well-developed in many countries. Many merchants offer credit card payment facilities to their customers.
  • Credit card transactions can be reversed or canceled by the merchant or credit card issuer. On the other hand, Bitcoin transactions are irreversible.

Choose a Crypto Rewards Credit Card in 2022

You must have heard about credit cards offering air miles, cashback, hotel vouchers, and other perks. Well, many issuers offer crypto rewards credit cards in 2022. A crypto rewards credit card will offer digital currency as a reward for each transaction. Compare the credit card features and choose one in 2022!

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