Credit card deposit is one of the more popular facilities of deposit and withdrawal on forex accounts around the world. However, US forex brokers will no longer be able to accept credit card deposits on forex account starting from January 31, 2015.

Credit card deposit is one of the more popular facilities of deposit and withdrawal on forex accounts around the world. However, US forex brokers will no longer able to accept credit card deposit on forex account starting from Januari 31, 2015.

CFTC
Back in June, we have reported that US National Futures Association (NFA) has approved a ban on the use of credit cards to fund retail forex and futures account, and that the ban subsequently became a subject for approval by the US Commodity Futures Trading Commission (CFTC). Yesterday (1/12), NFA announced that the ban has been approved by CFTC and will be effective starting from January 31, 2015.

The ruling prohibit NFA members, including US-registered forex brokers, to allow clients deposit in their futures or forex accounts using credit card. Even further, the ban also forbid deposit with other electronic methods tied to a credit card such as PayPal account that is funded by credit card. Brokers are allowed to accept deposit through the same method if they are able to ensure that the account is funded by debit card instead, and reject the deposit before accepting it if it is actually made by accounts tied to credit card. The rules will be applied to existing and new clients on all brokers that is registered with the NFA.

Deposit and withdrawal facilities in online forex broker are commonly done through three methods: bank wire, credit card, and e-payment. While the use of bank wire and e-payment for forex account deposit imply that the account owner uses already-owned money to trade forex, credit card indicates that the account owner uses borrowed money to fund high-risk forex trading. On the other hand, NFA inspection to more than 15,000 retail forex account found that the majority of credit card-funded accounts are unprofitable. Therefore, the agency aims to increase consumer protection by preventing people from getting into financial trouble in case their trades are repeatedly fall into losses.

However, the rule will likely affect US NFA-registered forex brokers that has been accepting credit card deposit on forex accounts, such as Forex.com, FXCM, Alpari US, Easy Forex, OANDA, IBFX, eToro, and others. It needs to be noted that credit card is one of the more popular deposit method to bypass the complicated and high fee of cross-country payment transfers, beside of e-payments. But it is still unknown whether the rules will be applied only to the brokers' clients that reside in the US or whether non-US based clients will have to change their payment methods as well.