Saturday, February 3, 2018

Major banks beginning to cut off credit card use for purchasing Bitcoin and other cryptocurrencies

Cryptocurrency mania has led many to mortgage their homes, max out their credit cards, and leverage their future on the hopes that the likes of Bitcoin and Ethereum would make them 'generational wealth' outside the avenues of 'normal' investments.  And for some this has proven lucrative, but primarily for those who got in early and prudently cashed out when cryptos reached all-times highs in late December and early January.

However there are a large number of individuals who got stuck (to this point at least) with buying in at the top and have been frantically watching their investments lose between 50 - 75% in just a short period of time.  And now because of this volatility, and the lack of fiscal responsibility by some investors, three major U.S. banks are cutting off the spigot and banning credit card use in the purchasing of cryptocurrencies.

A growing number of big U.S. credit-card issuers are deciding they don’t want to finance a falling knife. 
JPMorgan Chase & Co.Bank of America Corp. and Citigroup Inc. said they’re halting purchases of Bitcoin and other cryptocurrencies on their credit cards. JPMorgan, enacting the ban Saturday, doesn’t want the credit risk associated with the transactions, company spokeswoman Mary Jane Rogers said. 
Bank of America started declining credit card transactions with known crypto exchanges on Friday. The policy applies to all personal and business credit cards, according to a memo. It doesn’t affect debit cards, said company spokeswoman Betty Riess. 
And late Friday, Citigroup said it too will halt purchases of cryptocurrencies on its credit cards. “We will continue to review our policy as this market evolves,” company spokeswoman Jennifer Bombardier said. - Bloomberg


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