Apple launched a new credit card this week in partnership with Goldman Sachs and Mastercard, offering consumers 2% cash back on purchases made using Apple Pay (the company’s digital wallet service) and 1% on other transactions. There’s also 3% cash back on goods and services purchased directly from Apple.
Although Apple Card carries no annual fees or transaction fees, it does contain some fine print. In particular, Apple Card may not be used for cash advances or cash equivalents—a prohibition which includes cryptocurrencies, like bitcoin, according to the customer agreement posted on Goldman Sachs’ website.
In forbidding credit card purchases of crypto, Apple aligns itself with major credit card issuers, such as Bank of America, Capital One, JPMorgan Chase, and Citi. Since at least February 2018, all four have barred customers from using their credit cards to buy digital currency on Coinbase, a popular cryptocurrency exchange. Wells Fargo has also banned credit card purchases of crypto since June 2018.
Per Coinbase’s payment methods page, the exchange “no longer supports linking new credit cards.” A representative for the exchange did not reply immediately when Quartz asked which credit cards it still supports. Gemini, another popular crypto trading platform, only allows customers to fund their accounts through bank transfers, wire transfers, or deposits of cryptocurrencies.
By defining cryptocurrencies as a “cash advance” or “cash equivalent,” credit cards issuers determine how customers can (or rather can’t) access the crypto markets. They also suggest how consumers should perceive cryptocurrencies: as a medium of exchange. Credit card companies apparently don’t view bitcoin as digital gold, or a longterm investment, as many crypto collectors do.
Prohibiting crypto purchases could be a matter of safety (bitcoin’s price is notoriously volatile), but it also prevents consumers from gaming the cards’ reward systems. If you were allowed to buy—and instantly sell—thousands of dollars of bitcoin, theoretically, you could generate a cash-back return without incurring much risk. It would be roughly equivalent to printing money.