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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.
(Score: 1, Insightful) by Anonymous Coward on Sunday February 04 2018, @10:49PM
Why are you still dealing with megabanks?
You don't have a credit union near where you are?
-- OriginalOwner_ [soylentnews.org]
(Score: 3, Interesting) by requerdanos on Sunday February 04 2018, @10:55PM (26 children)
This makes a sort of sense in the case of Bitcoin. The Bitcoin, valued at over $8300 at this writing according to CNN Money [cnn.com], is probably not a good investment in that the price of it is likely to implode, taking away with it the Bitcoin investor's ability to pay credit card bills as it does away with his idealistic get-rich-quick notions.
But "Bitcoin and other cryptocurrencies?" Many of the cryptocurrencies aren't in this situation. Peercoin, for example, is trading at something like $5 right now. Where's the overwhelming risk there?
Sure, they are fiat currencies, backed by nothing of value, but they are in a pretty good group of other Fiat currencies like the U.S. Dollar.
(Score: 1, Insightful) by Anonymous Coward on Sunday February 04 2018, @11:00PM (8 children)
Try some empathy and self awareness with your intelligence. Chicks dig it. I should know. The amount of chicks who want me to either marry or adopt them is getting ridiculous.
(Score: 4, Interesting) by requerdanos on Sunday February 04 2018, @11:20PM (7 children)
This is good, and appreciated, advice.
I don't mean that having one's idealistic notions taken away by losing all one's invested money is necessarily a bad thing.
For most, that money was tuition.
Money paid to learn something. Specifically, "That was probably not a good investment idea."
It seems like the credit card providers are sending a signal along the lines of "We'd rather you learn before, not after." Doesn't always work that way.
(Score: 0) by Anonymous Coward on Monday February 05 2018, @01:41AM (5 children)
Sure! I was more referring to you talking of bitcoin as fiat, just like the dollar. That showed a lack of empathy to homeless people who need dollars, not bitcoin. You were, instead, signaling your intelligence by stating that bitcoin is fiat, just like the dollar is fiat.
(Score: 2) by requerdanos on Monday February 05 2018, @02:26AM (4 children)
Thanks. I guess the disparity might arise because when I was last homeless, bitcoin was under $20 (iirc), not inflated like it is now. But I would have been glad to accept bitcoin at the time, and would have cheerfully set up a bitcoin wallet for the purpose. Would have had to go to a coffee shop or library for the Internet access to do it.
Heck, I seem to also recall that there were very, very few places to spend your bitcoin in those days; it might have been a good idea to set up a wallet and pass around a payment address on the chance that someone would have said "Finally! Somewhere I can spend these bitcoin."
(Score: 0) by Anonymous Coward on Monday February 05 2018, @02:48AM
Cool! Sounds like we agree!
(Score: 2) by MichaelDavidCrawford on Monday February 05 2018, @07:04AM
... when I was totally busted.
I don't have a clue who my benefactor was but quite likely he - or she - was a Soylentil.
Yes I Have No Bananas. [gofundme.com]
(Score: 0) by Anonymous Coward on Monday February 05 2018, @12:59PM (1 child)
Back then Bitcoin was a viable payment option. While not necessarily accepted at as many places as it was, say, 6 months ago, when you made a transaction, it went through quickly. And, at that time, it was being touted as a currency that had 0 transaction fees. Try putting through a transaction on the blockchain now with no fee paid and see what "never going through" looks like.
Lightning may restore viability in the form of off-blockchain payments, but right now, without SOMETHING to restore it's status as a payment system, bitcoin is dead in the water. Nobody, certainly not homeless people, needs it.
(Score: 2) by requerdanos on Monday February 05 2018, @03:37PM
That's a dead tie for the dumbest thing I ever heard, no offense intended.
What's more, anyone who no longer needs their cryptocurrency balance is cheerfully encouraged to transfer it to me; I will deal with the hassles and problems for you. You can convert to Litecoin and send to Litecoin: LeqjwaBNTHjH3NyVXkGmSBL4eerDLKaBv1 [litecoin] or email me at requerdanos at freworld dot removethis info if you need an address in your cryptocurrency of choice (such as bitcoin).
Those cryptocurrency speculation problems will be long gone, along with your money. I am here to help.
(Score: 2) by MichaelDavidCrawford on Monday February 05 2018, @07:03AM
Despite having a great client.
Upon some reflection I decided to stick with this client because I'm learning quite a lot about the innards of USB.
What could be easier than USB? You plug in a keyboard or a mouse and it just works. Plug in a stick and a storage volume appears on the desktop.
Surely USB must be so easy to code that a child could do it.
It is my solemn duty to inform you that all that simplicity comes at the cost of coding drivers for a fiendishly complex electrical and software protocol. The mind simply reels.
Yes I Have No Bananas. [gofundme.com]
(Score: 2) by MostCynical on Sunday February 04 2018, @11:15PM (1 child)
Are credit card limits linked to assets?
In Australia, banks won't give you a credit limit beyond your assessed ability to pay, so having assests (house, regular stable income), means a larger limit.
Is the issue here, then, about the *value* of the transaction, or the "verifieablility" (for want of a better word)?
I suspect the issue is the potential exposure of the exchanges, where credit transactions usually have a vendor (with a risk rating), and, in these cases (crypto currencies), the exchanges are the vendors, but the risk profile is such the banks don't trust the abilit to get money back for dodgy/bad transactions.
"I guess once you start doubting, there's no end to it." -Batou, Ghost in the Shell: Stand Alone Complex
(Score: 3, Informative) by requerdanos on Monday February 05 2018, @12:38AM
As far as I can tell, the bank's decision to extend credit is the bank's alone.
The bank considers things like income, debt-to-income ratio, number of accounts paid as agreed (or not). Assets sufficient to cover the credit extended are generally not a factor, except in the special case of "secured" cards, whose credit limits are determined by the amount of money the receiver of the credit has in a savings account at the bank extending the credit.
Secured cards are more commonly used by people with "bad credit" (who are not able to qualify for a regular credit card) to establish "good credit" (a record of paying-as-agreed reported to the major credit stalking bureaus). Terms on secured cards often range from "not great" (higher-than-usual interest or fees) to "downright predatory" (much higher than usual interest and fees) because those who have no other option than a secured card are a captive market, as it were.
This article [edinformatics.com] seems to explain things from a U.S.-centric point of view.
(Score: 4, Interesting) by JoeMerchant on Monday February 05 2018, @02:26AM (6 children)
I'm going to step up here and say: that's not for my credit card issuer to pass judgement on.
Now, if the cybercurrency exchanges have a high fraud and dispute rate, maybe... but no way should the banks be throttling money in or out based on whether or not it is a good investment.
Україна досі не є частиною Росії Слава Україні🌻 https://www.pravda.com.ua/eng/news/2023/06/24/7408365/
(Score: 2) by FatPhil on Monday February 05 2018, @06:36AM (2 children)
Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
(Score: 2) by requerdanos on Monday February 05 2018, @03:41PM (1 child)
The "pseudotulip" is a terrific name for a new cryptocurrency. The web site and gui client designs could be inspired by actual historical tulip (and partial tulip bulb share) certificates.
(Score: 2) by FatPhil on Monday February 05 2018, @04:50PM
Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
(Score: 2) by Immerman on Monday February 05 2018, @03:27PM (2 children)
Sure it is - when you're using a credit card you're spending *their* money at *their* discretion. You are promising to pay it back - unless you contest the charge as unauthorized, or go bankrupt and and default, but that's the point - it's not your money that you're spending.
If you want to make a purchase without involving a 3rd party's interference, use cash rather than involving a 3rd party. Why should banks support a technology that seems destined to undermine many of the most profitable aspects of their own business model?
(Score: 2) by JoeMerchant on Monday February 05 2018, @03:56PM (1 child)
The same reason I should be able to shop for competing internet service providers using my a connection provided by my current ISP.
Allowing me to transfer my money to who I want, when I want, for whatever reason I want is the central concept of bank neutrality - something that has been implicit in banking since long before the internet.
Україна досі не є частиною Росії Слава Україні🌻 https://www.pravda.com.ua/eng/news/2023/06/24/7408365/
(Score: 2) by Immerman on Monday February 05 2018, @04:54PM
Sure, if you're spending *your* money maybe. But you can't do that with a credit card.
And what makes you think you'll continue to be allowed to shop for competing ISPs using your current one? Network neutrality has been repealed - ISPs are allowed to censor or throttle your internet access however they please. (unless you live in one of the states that are choosing to flaunt the federal ban on states passing their own NN laws)
(Score: 4, Informative) by JoeMerchant on Monday February 05 2018, @02:31AM
BTC trading at $8000-whatever, other coin trading at $5, yet another trading at 0.0004 - is immaterial to the "quality" of the investment. You can buy a fraction of a bitcoin, or hundreds of thousands of a coin with a low valuation, they don't move by the penny or dollar, they move by the market in percentage gains and losses. There's no difference buying 25 million coins worth 0.0004 and have them rise to 0.0005 as compared to buying 1.25 BTC at 8000 and having it rise to 10,000.
Україна досі не є частиною Росії Слава Україні🌻 https://www.pravda.com.ua/eng/news/2023/06/24/7408365/
(Score: 2) by FatPhil on Monday February 05 2018, @06:31AM (1 child)
A milli-bitcoin only costs $8, where's the harm in that.
But a kilo-Peercoin will set you back a whopping $5000, so clearly a debt risk it its value implodes.
Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
(Score: 2) by requerdanos on Monday February 05 2018, @03:45PM
Thanks to you both for some good perspective. I stand corrected.
I like discussion forums where intelligent people hang out (few though they may be)--it's nice to be wrong once in a while and still benefit from the process.
(Score: 2) by All Your Lawn Are Belong To Us on Monday February 05 2018, @02:44PM (1 child)
Although it proves very clearly that a credit card isn't just an instrument you can treat just like money, in that they regulate what you can apply the credit to.
Any form of actual loan (car, home, etc), this is understandable. But a bank extends a credit card based on the general credit of an individual and their ability to repay it. By dictating what you can and cannot spend it on the bank denies you the freedom that they supposedly are offering you. "You have credit.... but only for things we approve you should have credit for."
They've always done this, of course - there are other transactions which are prohibited on credit (like many forms of gambling, including online poker). This just feels more overt.
And they can't stop a person from taking a cash advance on their card, then buying some other exchange medium (bank account, prepaid credit card, etc.) to buy crypto with. Of course, the credit card company can get more money from you that way. Maybe that covers their risk, or maybe it just gives them additional profit. Or both.
This sig for rent.
(Score: 2) by requerdanos on Monday February 05 2018, @03:29PM
Or donating to wikileaks.
(Score: 0) by Anonymous Coward on Monday February 05 2018, @04:51PM (2 children)
Yet you are still more likely to get more of your money back when investing in Bitcoin, than if buying a lottery ticket. Yet I don't think the banks block buying lottery tickets (I never tried, though).
(Score: 2) by rcamera on Monday February 05 2018, @05:14PM
you can't buy lottery tickets with a credit card in many jurisdictions. that's a function of the state, though, not the credit card company.
/* no comment */
(Score: 2) by requerdanos on Monday February 05 2018, @05:19PM
I think the blocking works the other way around.
The merchants selling the lottery tickets (mostly gas stations and grocery stores) only allow cash purchases, or in some instances, cash or debit card. I haven't seen a merchant that offers lottery tickets for sale with credit card as a method of payment.
This is presumably because a credit card holder can contact the card issuer and report a transaction to be withdrawn, causing the merchant to lose the money to a "chargeback." In that event, the merchant has lost the money without recourse--they must pay the state or jurisdictional lottery association for tickets sold no matter what. Tickets can't be "voided," to avoid a fraud scenario wherein a merchant sells tickets to customers and then voids them to avoid paying the lottery association for the tickets.
(Score: 5, Informative) by NotSanguine on Sunday February 04 2018, @11:39PM (4 children)
That while it may seem to be heavy-handed of credit card companies to do this, they are only doing this when *credit* is being extended. The opportunities for fraud are immense:
1. Open credit card account with fraudulent details
2. Max out the credit with bitcoin purchases
3. Transfer bitcoins to a different wallet.
4. Profit!
This would cut out the necessity to purchase items and then sell them to realize monetary gain.
This seems likely, as the TFS claims that debit cards are unaffected by this "ban."
I could certainly be wrong, but it makes sense to me.
No, no, you're not thinking; you're just being logical. --Niels Bohr
(Score: 4, Insightful) by requerdanos on Sunday February 04 2018, @11:47PM
As far as I understand these things, I believe step 1 is more commonly "Purchase a list of skimmed credit card numbers in a seedy, run-down chat room."
(Score: 3, Informative) by zocalo on Monday February 05 2018, @12:03AM (2 children)
UNIX? They're not even circumcised! Savages!
(Score: 4, Informative) by requerdanos on Monday February 05 2018, @12:54AM (1 child)
The issuer is responsible for its errors, and for unauthorized charges (less a $50 you-lose fee in many cases).
As for a transaction that "goes bad," if it's not the issuer's fault, then it's not the issuer's responsibility, though many will refund you for a product that proves defective or a service that turns out to be worthless.
The U.S. Federal Trade Commission [ftc.gov] says on the topic "You generally can dispute charges for unsatisfactory goods or services (including issues about the quality of an item) if you made a good faith effort to resolve the dispute with the seller, if the charge is for more than $50, or if you made the purchase in your home state or within 100 miles of your current billing address. In addition to disputing the charge with the issuer, you may want to consider filing an action against the merchant in small claims court."
And sure, you can dispute a charge for a bad investment, but if you were trying to buy ripoff coins at $15,000 each, and an investigation reveals that you did in fact receive the ripoff coins (even if their value later dropped to 15 cents each), then the transaction didn't "go bad" at all--you bought what you were trying to buy, and you aren't going to get a refund from the issuer.
(Score: 5, Interesting) by zocalo on Monday February 05 2018, @01:18AM
UNIX? They're not even circumcised! Savages!
(Score: 4, Informative) by zocalo on Monday February 05 2018, @01:52AM
UNIX? They're not even circumcised! Savages!
(Score: 2) by MichaelDavidCrawford on Monday February 05 2018, @06:51AM
I tried four time with two separate cards to send just sixty dollars to Coinbase.
The payment was instantly declined.
Most of the time when I make an unusual payment I will soon receive a robo-call that enables me to confirm or deny whether that was my own authorized transaction. But I didn't get the call.
A couple days later I asked a teller about that. He called their security department, they told him they don't approve Coinbase payments "because there is a high potential for fraud".
Of all the exchanges I am completely convinced that Coinbase has the very least such potential. They carry what must be a very costly insurance policy that covers all their cryptocurrencies against security failures. Their US Dollar wallets are kept in bank trustee accounts that are FDIC insured.
And they're backed by venture funding.
Oddly my credit union is completely cool with Coinbase withdrawing my ill-gotten loot with Electronic Funds Transfers. I expected they wouldn't permit EFTs at first to I transferred at first $1,000, then $2,000 then $4,000 and all three were copacetically approved.
I at one time had an unrealized profit of four thousand dollars. That was quite cool I could buy a good-quality used car with money that I got by asking a magic lantern's genie to fulfill a wish, but no I held onto it.
As of last night I have an unrealized loss of seventy-five dollars.
I made three grand when I sold the NGC's that I bought during NAGA's ico, but then I quite cluelessly bought more NGC after I figured the price had gone as far down as it was ever likely to go, then to only too late discover that NGC kept going down.
I bought three other ICOs that I expect will work out well, but that I expect I should hang onto for at least a year before I sell them.
Yes I Have No Bananas. [gofundme.com]
(Score: 2) by MichaelDavidCrawford on Monday February 05 2018, @06:59AM
During the Dot-Com boom there was some guy who somehow managed to qualify for hundreds of credit cards. Clearly stock traders weren't the only ones to irrationally exhuberate.
He took the maximum cash advances out of all the cards then bought a bunch of internet stocks.
His entire house was wallpapered with sticky notes on which he wrote the date each monthly payment was due as well as the minimum payment amount.
Imagine his dismay when the Dot-Com crash hit.
With that kind of credit I expect he would have considered himself fortunate not to have been fitted with cement overshoes by The Mob.
Yes I Have No Bananas. [gofundme.com]
(Score: 3, Insightful) by maxwell demon on Monday February 05 2018, @07:13AM
In other words, they give their customers a perfect reason to avoid them, by demonstrating that they can arbitrarily restrict what you can buy using them, even when what you are buying is perfectly legal.
The Tao of math: The numbers you can count are not the real numbers.
(Score: 1) by liberza on Monday February 05 2018, @11:55AM
"then they fight you..."
(Score: 0) by Anonymous Coward on Monday February 05 2018, @10:48PM
You can smell it in the air.
Much like the *AA, adapt, or eventually die.