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Using a credit card to invest

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When thinking about using your credit card to invest, you’ll typically ask two questions: Can I do it — and should I?

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.

Whether using a credit card is a good idea is a separate issue. Before you do it, know that most experts turn their thumbs down on the idea.

Transfer your investment debt to the Barclaycard Ring® Mastercard®

  • Balance transfer: 0% intro APR for the first 15 billing cycles, then 13.99% variable
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  • Purchase APR: 13.99% variable
  • Cash advance: 13.99% variable
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Compare balance transfer credit cards for investments

Name Product Introductory Purchase APR Intro APR for Balance Transfer APR (Annual Percentage Rate) for Purchases
0% for the first 15 months (then 16.99% to 25.74% variable)
0% for the first 15 months (then 16.99% to 25.74% variable)
16.99% to 25.74% variable
0% intro APR for 15 months from account opening on purchases and balance transfers.
0% for the first 15 months (then 16.99% to 25.74% variable)
0% for the first 15 months (then 16.99% to 25.74% variable)
16.99% to 25.74% variable
0% intro APR for 15 months from account opening on purchases and balance transfers.
0% for the first 15 months (then 14.99% to 25.99% variable)
0% for the first 15 months (then 14.99% to 25.99% variable)
14.99% to 25.99% variable
Earn a $150 bonus statement credit after you spend $1,000 on purchases in the first 3 months. Rates & Fees
0% for the first 12 months (then 14.99% to 25.99% variable)
0% for the first 12 months (then 14.99% to 25.99% variable)
14.99% to 25.99% variable
Earn $200 bonus cash back after you spend $1,000 on purchases in the first 3 months. Rates & Fees
0% for the first 15 months (then 14.99% to 25.99% variable)
0% for the first 15 months (then 14.99% to 25.99% variable)
14.99% to 25.99% variable
Earn up to $250 back. Earn $150 back after you spend $1,000 or more in purchases with your new card within the first 3 months of card membership. Plus, earn an additional $100 back after you spend an additional $6,500 in purchases within your first 12 months. Rates & Fees
0% for the first 15 billing cycles (then 13.99% variable)
13.99% variable
A low, variable APR on purchases, balance transfers and cash advances.
0% for the first 15 months (then 14.99%, 18.99% or 24.99% variable)
14.99%, 18.99% or 24.99% variable
Earn unlimited 1.5% cash rewards on purchases. See Rates and Fees.
0% for the first 18 months (then 12.99%, 16.99% or 20.99% variable)
0% for the first 18 months (then 12.99%, 16.99% or 20.99% variable)
12.99%, 16.99% or 20.99% variable
An 18 months 0%% Intro APR period on both purchases and balance transfers, plus zero foreign transaction fees, makes this is a strong well-rounded card. See Rates and Fees
0% for the first 15 billing cycles (then 16.99% variable)
16.99% variable
Enjoy unique excursions, privileged access to exclusive events and insider opportunities.
0% for the first 15 billing cycles (then 16.99% variable)
16.99% variable
Receive an annual $100 air travel credit toward flight-related purchases including airline tickets, baggage fees, upgrades and more.

Compare up to 4 providers

How to use a credit card to invest

As we’ve discussed, investing with a credit card can be risky. But if you’re raring to go, here are a few ways to do it.

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.

There are big downsides to this method, however: Cash advances typically come with fees and higher interest rates. Also, they often start accruing interest immediately.

2. Leverage PayPal.

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.

3. Sign up for Acorns.

With the Acorns app, you can make microinvestments in exchange traded funds (ETF). And the app allows you to link your credit card. Learn more about Acorns.

4. 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.
What is a balance transfer?

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.
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.

Instead of using a credit card to invest …

If you want to invest on credit, consider opening a margin account instead. These accounts let you borrow money to purchase investments. For example, you might pay for half of an investment, then borrow the remaining funds from your broker.

Frequently asked questions

Kevin Joey Chen

Kevin Chen is a world-travelin', copy-writin', Game of Thrones-watchin' credit cards writer for finder.com. When he's not crunching the numbers on bonus points and comparing APRs, you can find him flying around the world in search of the perfect beer.

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