Toronto-Dominion Bank Restricts Crypto Purchase Using Credit Cards

[coinpediaJordan]

Toronto-Dominion Bank (TD Bank) has stopped customer from using credit cards to make cryptocurrency purchase and the decision taken by other several banks.
Click here to read more:  Crypto Purchase Using Credit Cards

[Pan Troglodytes]

Toronto-Dominion Bank (TD Bank) has stopped customer from using credit cards to make cryptocurrency purchase and the decision taken by other several banks.
Click here to read more:  Crypto Purchase Using Credit Cards

As I was explaining in another thread, it doesn't reflect that those banks are against crypto. They are simply resisting purchasing crypto with credit cards. The motivation behind it is that the credit cards purchase can be rolled back, what means that they have to return your money back to you, but the crypto you have purchased remains with you too, as there is no rollback mechanism in crypto. Thus resulting incompatibility motivates that they simply prohibit such purchases.

[o_e_l_e_o]

This is becoming more commonplace, and the banks have every right to do this.

Money spent on a credit card is not your money. It is the bank's money, and they have a duty to ensure their money is spent wisely and will be paid back.

[bitart]

This is becoming more commonplace, and the banks have every right to do this.

Money spent on a credit card is not your money. It is the bank's money, and they have a duty to ensure their money is spent wisely and will be paid back.

In some of the EU countries it's restricted by the law to buy e.g. lottery tickets with credit card or to pay for sports betting, etc... So when governments (and banks) want to restrict people from buying bitcoin with credit card, to prevent the future losses, it's understandable from their point of view. Maybe the restriction of debit cards as well, but it's not that easy, because what you have on your account (the debit card is attached to) is your own money and not a loan, so theoretically, you should spend it without any restriction with your debit card (or you can withdraw it from the ATM and after they can't stop you to buy bitcoin from the cash)... It's OK that they want to help the people (who don't have the necessary knowledge, generally speaking) but it's really hard to find the optimal solution...

[franky1]

banks dont care about 'debt risk' of thier customers

after all a credit card limit is in place to cover what the card holder can afford to pay back. so it doesnt matter if its a car, or a bitcoin. the credit limit secures the debt risk limit.

the real reason is to avoid costing the banks lots of money because of chargeback scammers.
they wont say that though because it would be just advertising to scammers that performing a chargeback is an option to get bitcoin and money back

[peter0425]

This is becoming more commonplace, and the banks have every right to do this.

Money spent on a credit card is not your money. It is the bank's money, and they have a duty to ensure their money is spent wisely and will be paid back.

Yes, I agree. But people doesn't have the control to buy anything they want with their credit cards. Well for me that in the case the first time I have like 3 approved credit cards. I went into a shopping spree, but its to late, I was in debt and soon I have to learn it the hard way .

But I don't know about the banks duty though, for me they gave you those credit cards so that later own you will be struggling to pay and the banks will besides the monthly fee.

So I don't know what suddenly they have this restrictions. And I don't buy that argument about they so called duty to ensure that should spend it wisely. Lol.

[patt0]

I don't really see any problems with this. First I don't think people should by crypto on credit, because it's to risky and they might lose a lot of money. Some people make poor investment decisions, and can't manage their bank very well, putting them in huge pressure, and since crypto is so volatile, they will probably have to sell it back, and will still lose money because they can't pay the interests on the credit.

When you buy on credit, you are using banks money, so I'm ok with them not allowing for they money to be spent on crypto through credit. I bought bitcoin, but I made a deposit first with my bank account, and then bought the coins. I didn't bought with a credit card, and everyone can still buy crypto this way, so this is not a "ban" on crypto, and I don't see any problems with it.

[bitart]

banks dont care about 'debt risk' of thier customers

after all a credit card limit is in place to cover what the card holder can afford to pay back. so it doesnt matter if its a car, or a bitcoin. the credit limit secures the debt risk limit.

the real reason is to avoid costing the banks lots of money because of chargeback scammers.
they wont say that though because it would be just advertising to scammers that performing a chargeback is an option to get bitcoin and money back

I understand now (mostly). Why the chargeback costs money to the bank? If a customer files a chargeback, the bank starts the investigation and if the bank decide in the favour of the customer, it deducts the money from the seller's account and credits the customer's account with the money? It's a hassle for the bank but this is just moving money from the seller back to the customer, so it's not the bank's money in the end. Or the bank credits the customer using the bank's money beforehand and tries to collect the necessary funds from the seller afterwards? In this situation the bank really runs the risk of the chargebacks, but this option seems a bit unrealistic to me, because the investigation has to finish before the bank takes any step?