Lowering the transaction cost for DCA through credit cards reward points. How?

about 2 years ago

In one of my previous posts, I shared that I am DCAing into Hive through my credit card for convenience's sake. I have been very busy!

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Why was I even open to DCA into crypto through my credit card?

Isn't the transaction fees higher than buying crypto through a regular on-ramp from a bank account?

No. Not when I buy during the crash and am confident that the price will go back up. I am no financial advisor to advise you to do the same, but I DCA into Hive even as the FTX saga unfolds because I have faith in HIVE. I have a 10K goal for Hive and for someone staring at Hive going up and down $0.50 Hive for a long while, Hive at $0.35 is a great discount.

Another reason why I am using my credit card for DCA is that I earn rewards points through my credit card purchase, too.

So yes, this is my approach in a gist: I use my credit card for crypto purchases and reduce the overall cost of transactions by earning reward points from it.

Of course, this might not work for you, because the workablity of these shenanigans depends on whether the specific credit cards are available to you.

This works especially well if your credit card gives you extra points for online purchases, and if they recognize crypto purchases as online purchases. While most banks have these credit card point systems in place, some may not allow crypto purchases through them.

If the bank-issued credit card does not allow for crypto purchases, the alternative is to sign up for a non-bank credit card account that allows for it.

Now, with that, the trick is to use a non-bank credit card account that can be tied to the bank-issued credit card for storing value. Be sure to use one that recognizes such debits as an online purchase and would grant reward points for it.

In short, if the bank credit that gives reward points does not give reward points for crypto purchases, then get another card that allows for crypto purchases and topped up using the bank-issued credit card to earn the rewards nevertheless.

It might not work where you are, but this is an idea to explore.

For those who are unaware, there are non-bank-issued credit cards out there. Just dropping some brands here (which does not mean I endorse them): Instarem, Revolut...

Definitely use something that you trust after doing your research.

Be aware that using a credit card for crypto purchases is a kind of leverage. BE mindful of the extra risk you are taking on.

Only invest the extra money you are willing to lose.

P/S: This is not financial advice, and please do your own due diligence before investing.

If you read this far... and if you are a like-minded Hiver who is on the path to learning more about Hive and crypto investing, and if you like to be tagged when I write such posts, I welcome you to leave a comment below and let me know. We can form an alliance to support each other's growth.

You might be interested in this post, @jacoalberts, @young-kedar, @vickvan, and @hankanon!