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Using a credit card to invest

It's possible in some cases, but strongly consider avoiding it.


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Most investment platforms won’t accept credit cards as a payment method. But if you really want to use plastic, you have a few roundabout ways to try.

Before investing in general, know there’s a significant likelihood you can lose some or all of your money. Investing with a credit card carries even higher risk. Steep APRs can easily wipe out your gains. And if your investments decrease in value, you’ll end up in debt while still having the burden of paying interest.

  • Disclaimer: Use the information here at your own risk

We’ve written this information to give you a better picture of the possibilities and risks of using a credit card to invest.

But we must also caution you strongly against using this method. It is exceedingly risky, not only because you likely won’t get anywhere near the returns you need, but because you can also land yourself deep in debt.

We recommend investing only with funds you have available instead of trying to invest with a credit card.

Can you buy stocks with a credit card?

Most brokers and online trading platforms won’t let you directly buy stocks with a credit card. However, there are some platforms that allow you to buy discount stocks or fractional shares with your card, and there are some workarounds with those brokers who don’t accept credit cards.

How to use a credit card to invest

As we’ve discussed, investing with a credit card is risky. However, you may be able to do it with the following methods:

  1. Take out a cash advance.
    Once you take out your cash advance, funnel it into your brokerage. For example, you could deposit cash into your bank account, which you’ll link to your trading account. You may also be able to deposit directly into your trading account with a cash advance check. If you decide to go with this method, consider applying for a credit card with low cash advance rates.
  1. Use a brokerage credit card.
    Some brokerage cobranded credit cards let you directly deposit your cashback rewards into your investing account. The more cash back you earn with these cards, the more you can deposit:

    • Fidelity Rewards Visa Signature Card
    • Schwab Investor Card from American Express
    • American Express Platinum Card for Schwab
    • TD Ameritrade Client Rewards Card
  1. Redeem credit card cash rewards.
    Most rewards credit allows you to redeem your rewards for cash. You can redeem this cash into your checking account and then make a deposit into your brokerage account.
  1. Leverage PayPal.
    Another strategy — of dubious validity under PayPal terms — is to create two PayPal accounts. Then link one account to your credit card and the other to your bank account. Once done, send money to yourself from the credit card-linked account to the bank-linked account. You may be able to fund your brokerage account directly through PayPal. If not, you can withdraw your PayPal funds to your bank account, which you’ll link to your brokerage.
  1. Sign up for Acorns.
    With the Acorns app, you can make micro-investments in exchange traded funds (ETF). The app allows you to link your credit card. Note, however, that funds for Round-Ups are drawn from your linked checking account, so you’re not actually using the credit from your card.

Learn more about Acorns

  1. Use a 0% APR balance transfer card.
    With a balance transfer, you move debt from other sources onto your credit card. You can take advantage of this by acquiring money through credit and then moving your debt to a balance transfer card. For example, you can use the PayPal strategy we discuss above and then use a balance transfer to move your debt to a 0% APR card. On the downside, each balance transfer you make typically comes with a fee of 3% to 5%.

What is a balance transfer?

  1. Buy commodities.
    If you have a good eye for valuable commodities, you can use your credit card for items like baseball cards and jewelry. Note that if you want to pay off your card balance with earnings from the sale of your commodities, you’ll need to be relatively certain your purchases will appreciate within a short period of time.

Our pick for a balance transfer card with rewards

Citi® Double Cash Card

  • Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.
  • To earn cash back, pay at least the minimum due on time.
  • Balance Transfer Offer: 0% intro APR on Balance Transfers for 18 months. After that, the variable APR will be 13.99% – 23.99%, based on your creditworthiness.
  • Balance Transfers do not earn cash back.
  • If you transfer a balance, interest will be charged on your purchases unless you pay your entire balance (including balance transfers) by the due date each month.
  • There is a balance transfer fee of either $5 or 3% of the amount of each transfer, whichever is greater.
  • The standard variable APR for Citi Flex Plan is 13.99% – 23.99% based on your creditworthiness. Citi Flex Plan offers are made available at Citi's discretion.
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Compare balance transfer credit cards for investments

Name Product Purchase APR Balance transfer APR Annual fee Filter values
Citi® Diamond Preferred® Card
0% intro for the first 18 months (then 14.74% to 24.74% variable)
0% intro for the first 18 months (then 14.74% to 24.74% variable)
Long 18 months intro APR periods on purchases and balance transfers. Plus Citi Entertainment℠ for deals on dining and going out.
Citi® Double Cash Card
13.99% to 23.99% variable
0% intro for the first 18 months (then 13.99% to 23.99% variable)
This one of the most valuable flat cashback cards. It comes with 2% cash back (1% when you buy plus 1% when you pay) and 18 months to pay off transfers.
Luxury Card Mastercard® Titanium Card™
14.99% variable
0% intro for the first 15 billing cycles (then 14.99% variable)
Enjoy unique excursions, privileged access to exclusive events and insider opportunities.
TD Cash Credit Card
0% intro for the first 15 billing cycles (then 12.99%, 17.99% or 22.99% variable)
0% intro for the first 15 billing cycles (then 12.99%, 17.99% or 22.99% variable)
3% on dining and 2% on groceries make this a valuable card for food purchases. Use it while traveling, too, with no foreign transaction fees. Available in: CT, DC, DE, FL, MA, MD, ME, NC, NH, NJ, NY, PA, RI, SC, VA, VT
CardMatch™ from
See issuer's website
See issuer's website
See terms
Use the CardMatch tool to find cards you're likely to qualify for with your credit score, without a hard pull on your credit.

Compare up to 4 providers

Should you use a credit card to invest?

It’s tempting to use a credit card to purchase investments. You can extract money from your card, then take advantage of the grace period from any accrued interest. Meanwhile, you can invest that money and hopefully start collecting a return on your investment before the interest kicks in.

That sounds great in theory, but in practice, it rarely pans out. Credit card APRs are generally between 15% and 20% — that’s a high price to pay to borrow money.

There’s more bad news: The average annual return for the S&P 500 is 10%. If you adjust for inflation, that figure drops to 7%. When you’re paying 15% APR to borrow money via credit card but only making a 7% return on your investments, you lose on the math.

There are alternatives to using a credit card to invest that can still boost your investment account. For example, with the TD Ameritrade Client Rewards Card, brokerage clients get an additional 10% value on points redeemed into their Ameritrade accounts.

How credit card interest and grace periods work

What about 0% APR cards?

Let’s say you have a card that offers 0% APR for 12 months. Should you take out money from the card to invest?

You certainly have more time for your investments to work out. But according to many experts, you’re still playing a risky game. If you take out a lot of money but your investments don’t appreciate within 12 months, you’ll be hard-pressed to pay back the money you’ve borrowed.

Worse, after 12 months your cushy 0% APR has expired — and it’s probably replaced by a high APR. So while you’re under pressure to pay off your balance, your debt is accumulating interest at a high clip.

As always, your investment decisions are up to you. But many experts recommend investing with money you already have. And if you’re going to borrow money to invest, do your research and know what you’re doing.

Should you trade on margin instead?

If you want to invest on credit, one option may be to open a margin account, which lets you borrow money to purchase investments. For example, you might pay for half of an investment, then borrow the remaining funds from your broker.

Keep in mind that trading on margin can be very risky. While you may find higher returns, you may also see amplified losses. This is because you must pay back your broker for funds you borrow whether or not you get a return.

Additionally, if you don’t have enough equity in your margin account, you’ll have to deal with a margin call. This means your broker requires you to deposit more money or securities into your account to maintain a minimum value — especially painful when your investments aren’t working out.

For experienced investors only

As you might have guessed, trading on margin requires expertise to execute properly. It is certainly not for beginners, who stand to lose heavily from it. Make sure you study extensively and have proper liquidity before attempting it.

What is credit card arbitrage?

Credit card arbitrage is borrowing funds from your credit card at a certain interest rate and investing the money into a higher-rate investment, profiting off of the difference.

Usually, this involves leveraging a card with a 0% purchase or balance transfer APR. As a simple example, you might invest in certain stocks with a 0% purchase APR card. Before your introductory rate ends, you’ll sell your stocks, pay off what you owe on your card and collect whatever’s left.

Be cautious when using credit card arbitrage. The reward might not be worth the risk, especially considering federal and state taxes.

Bottom line

Most brokers won’t accept credit card deposits. You may find some trading platforms that accept this payment method, but in most cases, you’ll need to find a workaround. This often includes making a cash advance or redeeming your cash rewards into your checking account and then making a deposit to your investing account.

If you like the second option, compare credit cards with rewards. But if taking a cash advance is your preferred option, look for credit cards with low cash advance rates.

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