Most people in the crypto world know that there are very few places to buy bitcoin that are safe and relatively fast. If you ask around you’ll hear people say Coinbase, Circle, and Local Bitcoins. Coinbase certainly has the best marketing, the cleanest interface and the best online presence. This combo draws in thousands of people week by week. It’s so easy your grandma can practically do it. But Coinbase is a business and businesses need to make money. So how does Coinbase make it’s money? Through fees, lots and lots of fees. Gone are the days where you could purchase thousands of dollars worth of bitcoin incurring only a few cents for fees.
“Gone are the days where you could purchase thousands of dollars worth of bitcoin incurring only a few cents for fees.”
Coinbase’s fees are split into two categories, direct and indirect. Direct fees are charged by coinbase. If you’re buying with a US bank account, you will be charged 1.49% with a minimum of 15 cents. If you use a credit or debit card, you will be charged 3.99%. This is what their support page says but when you get to the actual screen where you buy currency, you’ll find that things are slightly different. Personally, when I’m on the page and I use funds from my coinbase account, I’m charged way less than if I were to use a debit card or my bank account. And If I decide to use my debit card or bank account, it is the same amount in fees. I’ve tried the 3 different options with various amounts of money and the result has always been the same.
Indirect fees may be charged by your bank. Once upon a time coinbase would charge transactions with your debit card through San Francisco, California. Now, for some strange reason, transactions seem to be charged through Cheapside, London. Most US banks charge something like a 3% foreign transaction fee. This little hiccup have people upset, especially because there was no warning from Coinbase from switching transaction destinations. There are credit cards that don’t charge foreign transaction fees. I’ve read on the internet that Bank of America has such a credit card. All in all, do your research before you buy. It is still possible to use coinbase for profitable investments or good trades.