12/3/2023 0 Comments Stockpile gift card amazonBalance transfers may accrue interest beginning the same day a transfer is made, so you’ll want to pay close attention to the terms of your cardholder agreement. Depending on your card company and cardholder agreement, a balance transfer fee can run anywhere from 3% to 5% or more. Your credit card may allow you to transfer funds into your bank account, where you can spend them on whatever you want-including stocks. Investment FeesĮnsure that you check fees and fully understand the cost of using a credit card and the cost of trading with any app or site you choose to use. These might include investment fees, cash advance fees, late payment fees and varying interest rates if you encounter issues paying off your card’s balance each month-and in some cases, this list may only scratch the surface. Things To Consider Before Buying Stock With A Credit Cardīefore purchasing stocks with a credit card, be mindful of any fees. 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. 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. We cannot emphasize enough our dislike for the idea of using a cash advance or balance transfer to buy stock and our recommendation is to read your cardholder agreement to see if it’s permitted if you insist upon trying it. 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. If you’d like to make a purchase for more than $200 with a credit card, you’ll have to contact customer service to make the request. Stockpile allows a maximum purchase of $200 per 24 hours. You can buy a Stockpile gift card with a Visa or Mastercard (note that American Express or Capital One-issued cards are not currently able to be used to buy gift cards) 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 go as high as $200. 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. Using a credit card to buy stock can add risk to an already risky transaction, but credit card rewards may make it worthwhile. You can invest using a credit card, but just because you can do something doesn’t mean you should. Buying stocks is a risky game, but some ways of financing your stock purchases are less risky than others.
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