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Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. SHARE: aquaArts studio / Getty Images May 28, 2021 Ted Rossman is a senior industry analyst at Bankrate.com. He focuses on the credit card industry and helps consumers maximize rewards, get out of debt and improve their credit scores. Bankrate logo The Bankrate promise
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You can deposit U.S. dollars into a Coinbase USD wallet via a free bank (ACH) transfer. It typically takes three to five business days, but once the money is there, you can instantly convert it into crypto for a . If you use a debit card, you won’t have to wait three to five days, but the fee (3.99 percent) is much higher. Coinbase doesn’t accept U.S. credit card transactions. Keep in mind that Coinbase also charges a spread of about 0.5 percent for crypto purchases and sales. Of course, there’s substantial risk associated with crypto investments—but that’s mostly a topic for another day. One risk worth pointing out in this context is that . So while a crypto investor might find it useful to have some money in one of these accounts, you shouldn’t treat it like a checking account. SoFi charges a lower cryptocurrency trading fee (1.25 percent). This platform is worth considering, although a drawback cited by many crypto enthusiasts is that it’s a custodial account, not a crypto wallet like Coinbase. This means you don’t have as much control over your crypto. You can’t bring existing crypto holdings into the SoFi platform, and your only option for transferring crypto out is to convert it into U.S. dollars (and potentially trigger a hefty tax bill). Using PayPal and Cash App for crypto exchanges
These are two other popular crypto exchanges, and they generally follow a similar approach. Crypto buyers need to use money already in their accounts. An easy and inexpensive way to do that is to initiate a free ACH transfer from your bank account, which can take a few days to clear. It’s worth noting that these services have more bank account-like properties than Coinbase’s USD wallet. For example, you could have your employer direct deposit your pay into a or account. Or maybe you already have a PayPal or Cash App balance because your friends paid you back for dinner, you sold something on eBay, etc. Cash App does not offer FDIC insurance, though PayPal does have pass-through FDIC insurance worth up to $250,000 per depositor per account in some instances. To qualify, you must hold a PayPal Cash Plus account and meet certain additional requirements (these include using a PayPal Cash Card debit card, enrolling in direct deposit, buying cryptocurrency or establishing goals in your PayPal Cash Plus account). This is all part of PayPal’s “super app” strategy. The bottom line
You could potentially use PayPal as your checking account, debit card, credit card, crypto wallet, buy now, pay later (BNPL) provider, peer-to-peer payments platform and more. From a holistic perspective, I view PayPal as the more attractive way to buy crypto if you’re interested in aggregating several different accounts. If a one-off crypto wallet is more your thing, then the Coinbase USD wallet is a solid choice. Have a question about credit cards? E-mail me at , and I’d be happy to help. SHARE: Ted Rossman is a senior industry analyst at Bankrate.com. He focuses on the credit card industry and helps consumers maximize rewards, get out of debt and improve their credit scores. Related Articles