Stockpile express5/2/2023 Again, check the fees incurred by the app, brokerage or credit card and do the math to figure out if you actually come out ahead.Ĭards offering welcome bonuses for spending upon account opening may provide more profitable reward-earning options, but if you decide to seek out a new credit card with better rewards for the purpose of buying stock with it, keep in mind that each time you apply for a new card the bank will conduct a hard inquiry against your credit which may cost a few credit points. If your card does allow this, the most likely way to earn rewards on card purchases is by purchasing gift cards through Stockpile or another app offering the same service. Most credit cards do not allow you to earn rewards on cash-equivalent purchases-which may include gift card purchases, so more than likely your credit card will not allow you to do this. Rewards can be a motivating factor in trying to buy stocks with a credit card, but it’s actually quite rare to be able to pull it off. We cannot emphasize enough our dislike for the idea of using a cash advance or balance transfer to buy stock and our recommendation to read your cardholder agreement to see if it’s permitted if you insist upon trying it. The fees will be higher and interest will begin accruing right away unless you utilize a 0% APR offer. Remember that since balance transfers and cash advances on credit cards are not considered purchases, these charges will most likely not earn any redeemable points through your card’s reward program. If you decide to use your credit card to make a balance transfer or cash advance from your credit card account into your checking account, you can then invest directly from your checking into a brokerage account. Whatever amount you pay for the gift card, you will owe that on your credit card balance and will also be charged the additional investment and trading fees through the app. Again, be sure to calculate beforehand what your actual gain will be after the fees incurred. Stockpile allows a maximum purchase of $1,000 per day and $2,000 annually with a credit card. You can buy a Stockpile gift card with credit and then redeem the value on the card for purchasing stock shares. With the Stockpile app, you can buy fractional shares using gift cards, which have a wide range in value starting at $1 and going as high as $2,000. If you do decide it is worthwhile to buy stocks with your credit card, you will likely have to route your money indirectly to land it in your brokerage account. ![]() These methods are often more straightforward and more secure for the investor. Understandably, brokerage firms prefer you fund your brokerage account using bank transfers or checks. Be sure to do your research and consider the risk-reward proposition before making a financial commitment. You can invest using a credit card but as our mothers once told us, “just because you can do something doesn’t mean you should.”īuying stock with a credit card can add risk to an already risky transaction, but credit card rewards may make it worthwhile. ![]() Buying stocks is a risky game, but some ways of financing your stock purchases are less risky than others.
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