Because when you are buying "everything else", you expect its EFV to be around $0, so most of the people budget it accordingly. But if you are buying an asset hoping that the 100% annual return will pay your credit card interest and help you catch up with your rent, and that growth doesn't happen, it's 2008 all over again.
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.
>But if you are buying an asset hoping that the 100% annual return will pay your credit card interest and help you catch up with your rent
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.
You don't want to loan money to people who go broke. That's the thing credit card companies want to avoid the most. The whole point of the credit system is to prove that you are someone who pays back their 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.
Actually they couldn't care less if their customers go broke; it happens all the time. They just want their customers to take a long time to go broke, to make lots of charges (transaction fees), and to carry large balances (interest fees). When they're sure you're broke and they can't extract any more fees from you, they'll close your account and charge it off to a debt collector.
That's not really true, unless the only things you buy with your credit card are services and perishable goods.
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.)
Credit card companies main business is in transaction processing (both for customer-vendor transactions, and for helping banks administer these revolving loans to customers). The insurance is one feature, not the whole model.
Eh, to be that guy on the internet, I’ll argue that when I’ve had to put things on credit, they’ve been done in service of a future higher income, like spending more time working on my degree than taking up a low-paying job to cover my present expenses.
Buying investments of dubious value on credit though...isn’t this how the 20s ended?
Just chiming in to say what really needs to be said here:
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.
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.