At TPG, we primarily give attention to maximizing spending and serving to readers familiarize themselves with several types of bank cards to get outsize worth from those of their wallets. We additionally love discussing varied redemption choices you may make with issuer-specific rewards foreign money and the way bank card rewards might be pivotal in serving to you’re taking a dream journey.
There’s additionally a number of area of interest content material we cowl, together with this query we typically get from readers: Can I purchase shares with a bank card?
Briefly, the reply is sure — however we do not advocate doing so for a number of causes (one in every of them being it is extremely troublesome to discover a dealer that accepts bank cards as fee for shares).
Let’s assessment why shopping for shares with a bank card is not the very best investing follow — plus, what different choices can be found.
Issues to know before you purchase shares with a bank card
Before you purchase shares with a bank card, it is vital to keep in mind the assorted dangers, charges and different elements that might reduce into your income. We’re not simply speaking about maximizing factors right here — there are monetary dangers to concentrate on (as is the case with most investments).
Pay attention to funding charges
Shopping for shares with a bank card comes with a number of charges. You might find yourself paying money advance charges — which might high %5, late fee charges if you happen to neglect to pay your card on time and curiosity charges in case your stability is not paid off each month. Curiosity on money advances is way larger than utilizing your bank card for normal transactions and begins accruing when the money advance is executed.
These charges can add up rapidly, so be sure to learn the wonderful print in your card’s charges and costs and the wonderful print on the platform you intend to make use of to purchase shares.
It is dangerous
There are apparent dangers concerned in shopping for shares with a bank card. For starters, the inventory market might be unstable. A downturn can simply wipe out the rewards you earn from shopping for shares with a bank card.
Plus, the rising price of dwelling, inflation and different unpredictable occasions like layoffs imply it’s best to take warning and be well-informed relating to your funding choices earlier than making any choices — no matter whether or not they contain a bank card or not.
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Moreover, shopping for shares with a bank card might elevate some crimson flags together with your card issuer. Issuers could also be extra-vigilant relating to spending it deems “dangerous.” Inventory purchases definitely fall into that class. The very last thing you need is to get your bank card account shut down simply to earn some factors or miles.
There’s additionally the attainable unfavorable impression this might have in your credit score. Charging massive inventory purchases to your bank card can enhance your utilization charge, which might negatively impression your credit score rating. And if you cannot repay your bank card each month, you will incur curiosity charges that might wipe out any monetary achieve, not to mention the worth of the factors you’ve got earned.
Pay attention to the tax implications
Along with the charges imposed by your bank card issuer, your inventory investments could also be topic to capital features taxes. This could additional cut back the income (and rewards) you are incomes by paying with a bank card.
Associated: Are you able to pay taxes with a bank card?
Repay your card
No matter what purchases you are placing in your bank card, it is important that you just pay it off each month to keep away from excessive curiosity charges. Your short-term inventory features imply nothing if you happen to’re hit with a 29%-plus curiosity cost by your bank card issuer. For those who’re investing long-term, utilizing a bank card could also be a nasty thought if you do not have different funds put aside to repay the cardboard.
Associated: Listed here are 3 dependable methods to repay bank card debt
The place you should buy shares with a bank card?
Discovering a dealer, app or different associated platform to buy shares is troublesome. Most platforms — together with standard ones like SoFi and Robinhood — require customers to hyperlink a checking account so as to buy shares.
Stockpile — a brokerage app geared towards households — does permit customers to buy Stockpile present playing cards utilizing a bank card, however there are every day limits to how a lot you should purchase, amongst different issues that make this a less-than-desirable choice.
Associated Studying: One of the best funding apps
Which bank cards to make use of
For those who do determine to make use of a bank card to purchase shares, you will wish to use one which earns probably the most rewards attainable. So far as we all know, Stockpile is not coded as a bonus class, so you will earn the bottom variety of factors issued by your bank card. That is why you will wish to use a card that earns greater than 1 level per greenback spent or affords some type of annual spending reward.
Some good choices embody the next:
| Card | Reward charges |
|---|---|
| Chase Freedom Limitless® |
|
| Capital One Enterprise Rewards Credit score Card |
|
| The Blue Enterprise® Plus Credit score Card from American Categorical |
|
| Citi Double Money® Card |
|
Fund your brokerage account with a bank card
With so many charges concerned, it is undoubtedly value exploring alternate options to purchasing shares with a bank card. For starters, you may get a cash-back bank card after which use the sign-up bonus to fund a brokerage account and purchase shares via that account.
Constancy Rewards Visa Signature Credit score Card
The Constancy® Rewards Visa Signature® Credit score Card would not have a welcome bonus, however the card does earn 2% money again on all spending, which will get deposited instantly into your Constancy brokerage account.
Money-back rewards present unbelievable flexibility because you’re in a position to make use of them for journey or no matter you need, freed from blackout dates or restrictions. And if you wish to develop your funding portfolio, the Constancy Rewards Visa might help you just do that.
The data for the Constancy Rewards Visa Signature card has been collected independently by The Factors Man. The cardboard particulars on this web page haven’t been reviewed or supplied by the cardboard issuer.
For a extra versatile different, take into account the Citi Double Money. As an alternative of utilizing this card to purchase shares, you possibly can switch the cash-back rewards into your brokerage account (or convert them to Citi ThankYou rewards for high-value journey redemptions).
Schwab Investor Card from American Categorical
The Schwab Investor Card® from American Categorical affords a $200 assertion credit score after you spend $1,000 within the first three months of card membership.
That is not the largest bonus on the market, however if you happen to’re on the lookout for a long-term cash-back card to construct up your funding account, it is an choice. The cardboard earns 1.5% money again on every part, and the funds are robotically deposited into your Schwab funding account.
The data for the Schwab Investor Card has been collected independently by The Factors Man. The cardboard particulars on this web page haven’t been reviewed or supplied by the cardboard issuer.
If you would like a card with an even bigger welcome bonus and do not thoughts manually transferring money into your brokerage account each month, take into account Chase Freedom Limitless. The cardboard presently has a welcome provide of $250 cash-back after spending $500 on purchases within the first three months from account opening. It is not an enormous amount of money, however a pleasant solution to pad your funding account.
The Platinum Card from American Categorical Completely for Charles Schwab
The Platinum Card® from American Categorical Completely for Charles Schwab is exclusive in that it earns Membership Rewards factors that may be cashed out at a good ratio into your Schwab funding account.
The cardboard affords a welcome bonus of 80,000 factors after $8,000 spent inside six months of account opening. This bonus might be redeemed for a $880 deposit into your eligible Schwab account.
In keeping with TPG’s March 2025 valuations, Membership Rewards factors are value 2 cents every making this welcome provide value $1,600. Although there are undoubtedly higher makes use of for these factors, this redemption charge is healthier than cashing out your factors for a press release credit score.
The cardboard has a $695 annual charge and earns 5 factors per greenback spent (as much as the primary $500,000 every calendar yr) on flights booked instantly with airways or Amex Journey.
One other perk distinctive to this card is that cardholders obtain assertion credit for qualifying balances of their funding accounts: $100 for holdings over $250,000 and $200 for balances over $1,000,000. I might enterprise to guess that you probably have balances this massive in your funding account, you are not anxious a couple of $100-$200 bonus, however it’s good to have nonetheless.
The data for the Amex Platinum Completely for Charles Schwab has been collected independently by The Factors Man. The cardboard particulars on this web page haven’t been reviewed or supplied by the cardboard issuer.
Associated Studying: Greatest bank cards for wonderful credit score
Banks that pay you to fund funding accounts
If incomes miles for purchasing shares nonetheless appears like a superb worth proposition, needless to say you could possibly be giving up money. Just a few banks are providing substantial money bonuses for funding brokerage accounts. Here is an outline of among the greatest present affords:
Charles Schwab: As much as $1,000
Charles Schwab is providing $100 once you fund a Schwab One account beginning at $25,000. Bonuses go as excessive as $1000 for deposits of $500,000+:
- $100 for depositing $25,000-$49,999
- $300 for depositing $50,000-$99,999
- $500 for depositing $100,000-$499,999
- $1000 for depositing 500,000 or extra
Merrill Edge: As much as $600
Merrill Edge is providing as much as $600 once you deposit $200,000 or extra.
- $100 for depositing $20,000 to $49,999.99
- $150 for depositing $50,000 to $99,999.99
- $250 for depositing $100,000 to $199,999.99
- $600 for depositing $200,000+
E-trade: As much as $10,000
E-trade’s bonuses begin at $50 for $1,000. That is nice for low-level traders who desire a respectable reward in trade for funding a brokerage account:
- $50 for depositing $1,000-$4,999
- $150 for depositing $5,000-$19,999
- $300 for depositing $20,000-$99,999
- $600 for depositing $100,000-$199,999
- $800 for depositing $200,000-$499,999
- $1,000 for depositing $500,000+$999,999
For these with ultra-high internet value, depositing $5,000,000 will internet you a $10,000 money credit score in your brokerage account.
Backside line
It is attainable to purchase shares with a bank card, however there are a number of downsides to think about. Along with all of the charges concerned, you could be giving up profitable bonuses you could possibly earn by funding a brand new brokerage account with money. Investing in shares is dangerous as it’s, and if you happen to’re additionally utilizing a bank card, there are a lot of ways in which you could possibly land in a tricky spot financially.
Associated: Why factors and miles are a nasty long-term funding
