Lloyds Bank has confirmed that it has banned clients purchasing bitcoin and other cryptocurrencies using its credit cards from today (Monday).
Lloyds Bank cites the risk of people getting into debt by trying to make a ‘fast buck’ buying cryptocurrency using credit and then the value of cryptocurrency falling leaving customers with a debt they then struggle to pay.
The reality is that bitcoin, by example, reached a peak at over $19,000 a few weeks ago and today is more than 60%, have fallen into the $6,000-$7,000 price range over the weekend.
A totally sensible move by Lloyds and we suggest not just other banks but the regulator, The Financial Conduct Authority (FCA) should take action to reduce the risk of consumer detriment.
If you can afford to take the financial risk, then that is your choice, if you are ‘gearing’ i.e. borrowing to take a higher risk, then clearly it has a chance of a poor outcome leaving you in debt.
We have a saying at financialadvice.net: “You can only con a greedy person”. Please do not be greedy, take advice before in higher risk, speculative and unregulated investments.