Everything else you buy on your credit card has an expected future value of $0.00.
Why shouldn't you be able to buy things with arguably non-zero EFV as long as you are in good standing on interest and principal?
Why shouldn't you be able to buy things with arguably non-zero EFV as long as you are in good standing on interest and principal?
All this really means is that the banks' analysts are substantially more skeptical about cryptocurrencies than their average customers and they are trying to reduce their own risks.
If someone borrows more money than you can afford to pay back because you expected a guaranteed profit investing in a high-risk market, the cryptocurrency was never the problem.
Their completely irresponsible use of debt was the problem.
People can just as easily sink all of their liquid cash into cryptocurrencies, subsequently lacking the capital to repay their exiting debts.
In this case, likely many otherwise reasonable people are all suddenly making bad investments before their credit history can catch up to it. The CC company wants to avoid that risk, and so bans that type of purchase to get ahead of it.
The credit card companies' business model is similar in some ways to insurance. They skim a bit off the top of each transaction, and in exchange they bear various kinds of risk. One kind of risk is default/bankruptcy, as another commenter has mentioned. There's also the problem of fraud: since cryptocurrencies make it relatively easy to launder money, a Bitcoin purchase is disproportionately more likely to be fraudulent, even if the account is otherwise "in good standing".
(Note that it may also make sense to discourage or disallow gambling on credit for public policy reasons. For example, a number of states already prohibit the sale of lottery tickets using credit cards, even though those tickets have a non-zero expected value.)
Buying investments of dubious value on credit though...isn’t this how the 20s ended?
Buying a non-investment of dubious value... Yes!
Buying a different investment of dubious value... Yes! (commemorative coins, stamps, comics, beanie babies, etc)
If you use your credit card to pay for things you cannot afford, you are only doing yourself financial harm.
Credit cards are for building credit, generating rewards, and short-term borrowing.
If you are charging thousands of dollars to your credit card and planning to pay it back years later when you make more money, you're effectively just paying 1.5-2.0x the cost for everything you buy, because every year you are going to pay at least 15% in interest, and since you are spending more money than you make your debts will never go down.
Don't borrow from your future self. It makes no sense, and there's literally no guarantee that you'll ever make more than you do right now.