Last week investors started noticing additional fees on their bank statements. Both Mastercard and VISA decided to change the way cryptocurrency purchases are processed on their networks.
Most people who purchase cryptocurrency using a credit or debit card were charged the standard 4% transaction fee. From now on customers will have to pay additional 5% fee to a credit card provider as well as 4% service fee to the exchange.
At the moment, transactions to purchase any cryptocurrency are considered as a “cash advance” rather than a “purchase.”
Moreover, cash advances do not fall under the standard interest-free grace period that consumers expect for other credit card purchases. Cryptocurrency transactions are accrued and compounded daily. The interest rate is also higher for cash advances forming 25.99 % in one case.
This means that charges applied to any crypto purchase using a credit card will equal 10% plus interest.
By reclassifying crypto exchanges, VISA and Mastercard intend to complicate investing in cryptocurrency.